Input tax credit on freight inward and other services

[Guest]

Our problem is as under we are registered under service tax act for transportation of goods by road we are paying service tax to the transporters on freight inward calculated on 25% of the freight amount we are paying service tax on that freight also on which the transporter is not charging on the basis on same calculation. we are paying service tax on freight outward also in those cases where the transporter is not charging service tax. we are paying service tax on other such services like commission, clearing and forwarding charges, courier and telephone services. please let us know whether we are entitled to claim input credit of service tax paid on freight inward and other services against the amount payable on freight outward, we shall be grateful for your early reply thanks and best regards s.c.garg/essel agro pvt ltd

AI Summary

Entitlement to Claim Input Tax Credit on Service Tax for Freight and Other Services Under Rule 2(l) of CC Rules ESSEL AGRO (p) LTD raised a query regarding their entitlement to claim input tax credit on service tax paid for freight inward and other services like commission, clearing, forwarding, courier, and telephone services. They are paying service tax on freight inward and outward, even when not charged by the transporter. S Gupta responded, indicating that credit can be taken for input services used in providing output services. While it's challenging to identify services utilized specifically for goods transport, input services falling under the inclusive part of the definition in rule 2(l) of the CC Rules may be eligible for credit.