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

Service tax on GTA: including transport in excise value does not eliminate separate service tax liability for the receiver.
Service tax on GTA services is independent of central excise valuation: including transport charges in excise assessable value does not by itself eliminate a separate service tax obligation. Where a company pays a related transporter, the company may be required to discharge GTA service tax depending on invoicing and contractual allocation; conversely, if transport has already been subjected to excise as part of the billed value, a contrary view holds that service tax should not be levied again. Debit notes or associated enterprise entries may trigger service tax consequences, and the availability of cenvat credit remains an open question.