We hv following query. We request your Valuable review on this.
The assessee is paying service tax on goods transportation by road freight....as a service receipient.
The assessee has availed credit of ST paid by it on Advertisement Exp. and have utilised the same for paying service tax on freight, payable by it as a receipient of service.
The assessee has done so upto 1st March, 2008, under bona fide assumption that, it is a "deemed service provider" and therefore can take credit and utilise the same for payment of service tax on frieght.
Sir, Will u please guide us as to 1. Whether such a credit can be availed and utilised by the Service Receiptient for Payment of Service Tax on Freight ? 2. Which are the sections/provisions/rules under which the assessee is eligible OR not eligible to availe and utilise such credit ?
07 May 2008
According to the information provided above, GTA becomes your input service only like your advertisements. So, for availing input credit of ST paid on GTA and Advertisements, You should have out put service which is taxable. Then only you are entitled for input credit.
Still if you have out put service, your ST on Advertisement becomes common input tax where u are entitled for 20% out put S.T Payable.
CAclubindia
