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 for reimbursed freight service tax requires GAR-7 challan as documentary proof for buyer to claim.
A purchaser cannot claim cenvat credit solely on the basis of a purchase bill that includes reimbursed freight service tax. Credit is claimable only upon production of the original payment challan (GAR-7 Challan) evidencing the supplier's payment of service tax, and only if the service qualifies as an eligible input service and other conditions under the cenvat rules are met.