CENVAT CREDIT

[Asked by Guest]

plz sir/madam, plz provide me in detail whether service tax input on service tax paid toward carriage inward, domastic carriage outward and export carriage outward is available or not. if availble plz gv me notification no.

[CA Rachit Agarwal]

Cenvat Credit availment is subject to Rule 4 of Cenvat Credit Rules 2004.

As cenvat credit can be availed provided the input service is used for the output service or for the production of final products and fulilment of definition under Rule 2(l) of CCR, 2004.

Refer Cenvat Credit Rules 2004.

Hence if service tax paid on Freight service is upto the place of removal, Cenvat Credit can be availed.

[NEERAJ KUMAR, RANCHI]

Hi,

As said by Mr Rachit, credit will be available to you, as far as service tax on transport of export consignments are concerned, exemption is availavle under Notification No. 18/2009-ST.

[rakshit verma]

As per clarification given by Board's Master circular No. 97 dt 23.8.2007, if sale is on FOR destinatiuon basis, then place of removal is shifted to the destination. Hence any service Tax paid on freight upto the place of removal, credit can be taken. And in case of Export, place of removal is also shifted to the place of shipment. However, the isuue of cenvat credit on outward freight , from 01.3.2008, has been referred to the divisional bench of the Tribunal.

 

Rakshit Verma, Advocate

[Vivek Harsh]

As per Rule 2(I) of  CCR, 2004 credit shall be allowed

AI Summary

Cenvat credit availability for freight services depends on whether service tax is paid up to the place of removal.
Cenvat credit on service tax for freight is available only if the transport service is an input service used for the output service or manufacture under Rule 2(l) and subject to Rule 4 of the Cenvat Credit Rules, 2004; credit is limited to freight paid up to the place of removal. The contractual allocation of place of removal (e.g., FOR destination or export shipment) shifts where creditability attaches and affects entitlement; administrative clarifications and an export exemption have been cited, and certain outward freight credit issues have been referred to a tribunal.