Utilisation of Cenvat for payment of service tax

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CAN A 100% EOU USE CENAVT CREDIT OF INPUTS & INPUTS SERVICES TOWARDS ADJUSTEMNT OF LIABILITY OF SERVICE TAX OF TRANSPORTATION OF RAWMATERIALS.THE UNIT IS EXPORTING MANUFACTURING & EXPORTING GOODS ONLY.SOME REJECTS ETC ARE SOLD LOCALLY AS DTA SALES.

AI Summary

Cenvat Credit Usage for Service Tax on GTA Services Clarified: Cash Payment Required Post-March 1, 2008 A 100% Export Oriented Unit (EOU) inquired about using Cenvat credit for service tax liabilities related to the transportation of raw materials. The unit primarily exports goods, with some local sales of rejected items. One response indicated that Cenvat credit cannot be used for paying service tax on Goods Transport Agency (GTA) services, applicable to EOUs as well. Another response clarified that before March 1, 2008, service tax on GTA services could be paid using Cenvat credit, but post that date, it must be paid in cash as GTA is no longer considered an output service.