credit availment

[RAMESH ANANTHAKRISHNAN]

We produce nylon monofilament. Our product is fully exempted as per Notification 30/2004. We are paying Service Tax for GTA and other services related to our production. Though the product is exempted from payment of excise duty shall we take credit for the amount paid as service tax and set off the service tax payment paid under GTA?

 Kindly advise.

 

AI Summary

Cenvat credit on input services barred where final product is exempt; cannot set off service tax against GTA liability.
Manufacturers clearing goods under an exemption conditioned on non availment of Cenvat credit are barred from taking credit of inputs or input services; therefore service tax paid on input services cannot be claimed as Cenvat nor set off against GTA service tax liabilities, and GTA is treated as excluded from the definition of output service under the Cenvat rules, though export related credit may be available if separately eligible.