Liability of service tax - cenvat credit

[SAPTHARISHI IYER]

A company is manufacturing drums and supplying it to oil PSU. As per contract the company has to transport the goods upto the refinery. A sister concern of the company is the transporter who is not registered under service tax. Company's billing is inclusive of transport cost and excise duty is paid accordingly. If excise duty is paid on a cost inclusive of transportation cost, then is it necessary to pay service tax separately?. If yes then legally who has to bear the service tax liability and if ST is paid can we take credit of the same.

AI Summary

Debate Over Service Tax on Transport Costs in Excise Duty-Inclusive Billing for Drum Manufacturer Supplying to Oil PSU A company manufacturing drums supplies them to an oil PSU, including transportation to the refinery by a sister concern not registered under service tax. The company's billing includes transport costs, and excise duty is paid on this total. One response suggests that service tax on Goods Transport Agency (GTA) services is separate from excise duty, and the company should pay it. Another response argues that if excise duty is charged on the transport-inclusive bill, service tax isn't applicable. If the sister concern invoices the company or PSU, the company must handle the service tax liability, regardless of the sister concern's registration status.