Cenvat credit on outward transportation

[Vijay Chitte]

Query on GTA Service tax credit on outward transportation. I explain by way of illustration. (i.e. I want to transport my goods from Ahmedabad factory to Foreign country. For that Transporter have to take loaded container from A’bad. Factory to ICD Sabarmati location, and further, said container has to transport from ICD Sabarmati location to Mumbai Port, and final, this container shift in to shipment.), As per F.No. 137/3/2006-CX.4 “Input service includes ‘outward transportation’ up to the place of removal, selling the goods from depot, is also eligible to take credit of Service tax paid on transportation of goods up to such depot. My first query is, As per the above illustration up to which place we can avail the CENVAT credit on outward transportation? Is it up to the ICD location? Or up to the Mumbai Port location? And my second is, which is my place of removal? Is it Factory?, ICD location?, or Mumbai port? plz. give your relevant inputs.

[Surender Gupta]

Since you are the manufacturer of excisable goods, i think there should not be any problem in availing cenvat credit on the GTA service as mentioned by you in the query. Before reading the inclusive part of the meaning of input service under rule 2(l) please read the main part under clause (ii) ...... and clearance of final products from place of removal.

AI Summary

Cenvat credit on outward transportation: manufacturer's entitlement depends on the defined place of removal under input service rules. The manufacturer of excisable goods can avail Cenvat credit on the GTA service for outward transportation as described; entitlement is governed by the inclusive part of the input service definition and the principal provision addressing clearance from the place of removal, so the availability of credit depends on the statutory definition of input service and the concept of place of removal rather than merely the transport legs.