Circumstances under which credit of payment to GTA can be claimed

[Guest]

When and under what circumstances a person regd. with service tax and paying freight to a GTA can claim credit thereof. What are the restrictions particularly with reference to place of removal. Quote of notification/circular details will be appreciated.

[Surender Gupta]

Your query is incomplete and fails to indicate the purpose. Anyhow please refer to definition of input services provided in section 2(l) of the Cenvat Credit Rules, 2004 which is read as under: - (l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

AI Summary

Cenvat credit for outward transportation: freight to a GTA is creditable when linked to the output service or clearance up to place of removal. A person registered for service tax may claim Cenvat credit for freight paid to a GTA when the expense qualifies as an input service under the Cenvat Credit Rules, 2004 - that is, where the service is used by a provider of taxable service for providing an output service, or used by a manufacturer in or in relation to manufacture and clearance of final products from the place of removal; outward transportation up to the place of removal is expressly included.