Service Tax paid on GTA service is a case where tax liability is discharged by the service recepient. Abatement of 75% is also allowed, but Service Tax has to be paid in cash, that is, CENVAT credit could not be utilised to pay such service tax. Hence, in a sence CENVAT credit was not allowed to be utilised for payment of such tax. Now looking from the other side, GTA service is an input service for the consignee, hence credit of service tax paid on GTA service is allowed.
In my opinion, most of the notifications providing for abatement do not allow CENVAT credit on inputs & input services to the service provider if he claims abatement. Such notifications do not restrict Credit of service tax paid in such manner to the Recepient of service. In case of GTA it is the Service Recepient who pays Service Tax and hence credit is allowed.
Please quote the above judgement here so that thing could be understood and clarified properly.
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