04 November 2009
We are traders in furnace oil & other chemicals. There are huge amount of transportation involved on what we have to pay service tax @ 2.575% under reverse charge mechanism principal. Kindly advice can we utilise our cenvat credit balance for making above service tax liabilities.
Wheteher there are any recent notfication/amendment/changes in the above provision ??????
05 November 2009
You need to pay service tax @2.575% on frieght charges if the same is paid to a goods transport agency. But you cannot use the cenvat credit balance available to you for the payment of service tax on GTA, because CENVAT credit can be utilized only for the payment of output service. Since the GTA service is an input service to you, you cannot make use of the cenvat credit balance available. But you can availal the service tax paid on GTA service upto the place of removal of goods,ie normally inward transportation for purchase etc, as CENVAT credit and can utilize the same for the payment of service tax on for payment of excise duty/STax
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