Credit of Service tax on outward GTA

[sukhvinder singh]

Respected All,

Sir Can i take the Credit of service tax on the freight (outward freight) of goods transportation by road paid by me.

please tell in details

 

Thanks & Regards

 

[YAGAY andSUN]

It is allowed up-to the place of removal.  As there was an amendment in the definition of the Input Services where as phrase 'from the place of removal' has been replaced by phrase 'up-to the place of removal' in context to GTA Services.

 

[phaniraju konidena]

In accordance with the decision of the Hon’ble High Court of Karnataka in the case of CCE Vs. ABB LTD.,  (2011 (3) TMI 248 - KARNATAKA HIGH COURT) =2011 (23) S.T.R. 97 (Kar.) you can take the cenvat credit on ‘Outward Transportation’ on certain conditions viz.  when the ownership of the goods and the property remain with the seller of the goods till the delivery of goods in acceptable condition to the purchaser at his door step, the freight charges incurred by the manufacturer for such sale and supply at the door step of the customer are subjected to service tax and therefore, it falls within the definition of input service’ as the subsequent amendment by Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008 substituting the word ‘from’ in the said phrase in place of ‘upto makes it clear that transportation charges were included in the phrase ‘clearance from the place of removal’ upto the date of the said substitution.

AI Summary

Input service credit on outward transportation allowed up to place of removal when freight is taxable as an input service. Credit of service tax on outward freight by road is allowable up to the place of removal; where ownership remains with the seller until delivery at the buyer's doorstep, the freight charges incurred by the seller are subject to service tax and qualify as an input service. An amendment replacing 'from the place of removal' with 'up to the place of removal' in the Input Services definition clarifies the scope of GTA-related transportation credit, consistent with the cited judicial view.