Utilisation of Cenvat for payment of service tax

[Asked by Guest]

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.

[Surender Gupta]

To pay service tax on GTA service, whether inward or outward, no cenvat credit is available. This principal is applicable to EOU also.

[RadheyShyam Mangal]

the payment of service tax on gta service could be made from cenvat account only upto 01.03.2008. from 01.03.08 the gta service is no more an output service hence the service tax on such service has to be made from cash.

AI Summary

Cenvat credit cannot be used to pay service tax on goods transport agency services; payment must be made from cash.
Cenvat credit cannot be used to pay service tax on GTA services for an EOU; initially payment from the Cenvat account was permitted until a specified cut-off, after which GTA ceased to be treated as an output service and the service tax must be paid in cash.