Availment of cenvat credit of service tax paid on freight

[pardeep bisht]

We have received the purchase bill in which party add the freight and service tax on the added freight. so pls suggest can be avial the benefit of service tax and also provide the rule under which service tax levied by the party

[Surender Gupta]

You can not take cenvat credit on the basis purchase bill. When the seller pays the amount of service tax in the capacity of recipient and get the same reimbursed from the buyer in the purchase bill, it is highly advisable that buyer should ask for the original copy of GAR-7 challan through which the seller has paid the service tax. As per rule 9 of the Cenvat Credit, in this case, cenvat credit can be availed only on the basis of GAR-7 Challan, provided all other conditions are satisfied i.e. it should be an eligible input service.

AI Summary

Cenvat Credit on Service Tax for Freight Requires Original GAR-7 Challan, Not Just Purchase Bill Under Rule 9. A query was raised regarding the availment of Cenvat credit on service tax paid for freight included in a purchase bill. The response clarified that Cenvat credit cannot be claimed based solely on the purchase bill. Instead, the buyer should request the original GAR-7 challan from the seller, which evidences the payment of service tax. According to Rule 9 of the Cenvat Credit Rules, credit can only be availed if the service is an eligible input service and all conditions are met, with the GAR-7 challan as the basis for claiming the credit.