Cenvat credit of service tax on export sale

[Guest]

A LTD Manufacturing co. exported some products and paid freight ( air / sea ) and also paid other charges alongwith service tax. Can the co is eligible for CENVAT credit of service tax on export sale activity ? is answer will chage if the same is for import activity ? Manoj

[Guest]

Rule 5 of Cenvat Credit rules, 2004 allows cenvat credit even if goods are exported without payment of duty. However, in case of import of goods, if case these goods are used for manufacturing activity, you are eligible for cenvat credit as usual on input services.

[Guest]

Service Tax paid on freight will be allowed upto the palace of removal as input service. However service tax paid beyond the place removal have some controversy because of input service definition is not clear u/s. (2) (l) of Cenvat credit Rules. However courts already have held that beneficial provisions should be constructed in liberal manner to give the benefits. So i am on the view that Service Tax paid beyond place of removal will be allowed.

[Madhukar N Hiregange]

In my view the st paid on such services would be that relatingto clearacne of the product. As long as the prodcut is excisabel the credit would be available. If it were paying for incoming servcies from outsdie India that also would be eligible as input credit.

AI Summary

CENVAT Credit Eligibility Confirmed for Export Freight Charges Under Rule 5 of Cenvat Credit Rules, 2004. A manufacturing company inquired about the eligibility for CENVAT credit on service tax paid for export activities, specifically concerning freight charges. Responses indicated that under Rule 5 of the Cenvat Credit Rules, 2004, CENVAT credit is allowable for exports without duty payment. For imports, credit is available if the goods are used in manufacturing. There is some controversy about service tax paid beyond the place of removal, but courts have generally favored a liberal interpretation to allow such credits. The consensus is that service tax on export-related services and incoming services from outside India is eligible for credit.