REGARDING SERVICE TAX ON FREIGHT RELEATED TO EXPORT

[SANJEEV JADHAV]

Dear Sir, We are manufacturer and exporting our goods. We are paying service tax on inward as well as on ourward freight. My query is that while calculating service tax on GTA, can we deduct freight amount releated to export of goods. For example inward freight is 100000/- and Outward freight is 50000/- which includes Rs. 40000/- freight related to export of goods. Can we have to pay ST as per below: Inward freight = 10.3% on Rs. 100000/- = 10300.00 Outward freight = 10.3% on Rs. 10000/- = 1030.00 (50000 - 40000 = 10000) Is above calculation is correct ? Please also give clarification of Notf. No. 18 & 19/2009 dated 7.7.2009. For calculating service tax above is it necessary to submit declaration as mentioned in the above notifications.

AI Summary

Service tax on GTA services: taxable portion subject to tax; inward freight creditable, export freight needs refund or exemption.
GTA services attract service tax only on the taxable portion after abatement; service tax paid on inward freight is eligible for Cenvat credit. Export-related outward freight is not creditable beyond prescribed limits and must be addressed through refund or exemption procedures. To claim exemption an EXP1 application to the Assistant/Deputy Commissioner is required, approval reference must be quoted on bills, and exempted services must be reported in half-yearly EXP2 returns.