cenvat credit of expenses reimbursed to c&f agent

[Asked by Guest]

Dear all,

Can an asessee get the cenvat credit of expenses reimbursed to clearing & forwarding agent?

e.g. x a c&f agent pays any amount to mumbai port trust on behalf of the assessee. Mumbai port trust issues the invoice in the name of 'x'

x raises a debit note on assessee attaching all the bills of port trusts but does not mention the service tax amount and number in his debit note

assessee reimburses such amount to c&f

Can assessee get the cenvat credit?

Thanks in advance.

[Brijesh Verma]

Dear Paresh

First of all the it is not clear as to whether the C & F has charged any service tax or not. Moreover, it seems quite impractical in view of the Valuation Rules that the reimbursable expenses which are incurred to the C & F as a pure agent are being seen as taxable amount. Pls check vis-a-vis Valuation rules and specially in regards such pure agent expenses. 

[Snehal Kulkarni]

This is the practical difficulty faced by most of the assessees.

In normal course, the Manufacturing Company arrange a Freight Forwarder for clearing and forwarding of their goods ( either Export or Import ).

This Freight forwarder used to avail the Services like CHA, Port Authority etc from others. These Service Provider raise the Bills in the name of Freight Forwarder who pays them on behalf of the Company.

After departure/Arrival of the shipment, the Freight Forwarder raises a Single Bill where he mentioned all the relevant Charges paid by him on behalf of the company.

Now the question arises, what about the service tax paid. Since the Bill of the Freight Forwarder doesn't show these ST, the company cann't avail the Cenvat Credit of the Service Tax Paid.

In such cases, you should ask the Freight Forwarder to raise the Bill on account of Company directly and can avail the Cenvat Credit of Service Tax Paid as an Input Service.

If the amount involved in this is very huge then may appoint the different agencies. But this seems to be difficult in view of co-ordination.

AI Summary

Cenvat credit: entitlement depends on proper invoicing and visible service tax when expenses are passed through clearing and forwarding agents.
Claiming cenvat credit for expenses reimbursed to a clearing and forwarding agent depends on whether service tax is charged and shown in invoices; absent tax particulars on the agent's consolidated bill, the assessee cannot readily avail cenvat credit. To enable credit, obtain direct invoices or have the agent's bill expressly record service tax and supporting documents so the taxed services qualify as input service.