GOODS TRANSPORT SERVICE

[SNEHAL SHAH]

Sir,

We are the manufacturing of various HDPE & PVC products & we pay Service tax on GTA every month INWARD AND OUTWARD .

We pay servcie tax on ( Rs.100 -- Freight amount --- 75% amendment i.e. we pay service tax on Rs.25/- 10.30 % i.e. Rs.2.58/- Service tax deposit in Bank ) .

Now my Question is that can i take Cenvat credit on Input Service tax payment on GTA after benifit awailed of AMENDMENT ?

Please guide for this point .

Thanks ,

SACHIN

 

[Vijay Chitte]

Notification 01/2006-, dated 01-03-2006 was ommitted by Notification 12/2008-ST, datd 01-03-2008. To give effect to the 75% exemption, another notification 13/2008-ST, w.e.f 01-03-2008. Now, abatement is remorved, 75% exemption are avalable

w.e.f. 01-04-2011 u can not take credit of outward transportation, prior to this date it is arguable, But u can take credit of service tax paid on GTA on inward transportation as manufacturer.

 

[Snehal Kulkarni]

 

Dear Mr Sachin

 

Beyond doubrt, you can avail the Cenvat Credit of Service Tax Paid on Inward Transportation. Made the payment on the Separate Challan.

As far as, Cenvat Credit on Service Tax Paid on Outward Tranporation is concern,  please refer to the Circular No. 97 /  8  /2007 dated 23-Aug-2007

Under certain condition, as prescribed under the Circular, you can avail the Cenvat Credit of Service Tax Paid on Outward Transporation

 

[Vijay Chitte]

IF outward freight is not included in assessable value, you should be very careful while taking Cenvat credit since dispute regarding assessable value may arise. Outward freight is eligible as input service even if its value is not included as valuation and cenvat credit are two different issues.

AI Summary

Cenvat credit on transport services: inward transport credit available, outward transport credit restricted after the amendment. Manufacturers can claim Cenvat credit on service tax paid for inward GTA transportation when tax is paid separately. Credit for outward transportation is restricted after the abatement/amendment came into force, though pre-amendment credits may be arguable and certain administrative guidance allowed limited outward-credit under conditions. Care is required if outward freight is excluded from assessable value, since claiming Cenvat credit may provoke valuation disputes; assessable value and input-service credit must be treated as separate issues.