Cenvat Credit on GTA

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This query is : Resolved

CA Pankaj (Querist)

30 December 2009 Dear,

Pl guide, We are into manufacturing and not providing any output service.

We pay service tax on inward transportation (GTA)service under reverse charge method on behalf of transporter availing benefit of abatement.

Can we avail credit of this service tax paid on GTA?
Is there any need to take any declaration from transporter for availing credit?

regds
pankaj

CA Sidhi Gaur

CA Sidhi Gaur (Expert)

30 December 2009 under reverse charge, payment of service tax has to be made in cash only and can not utilize credit.but this amount paid can be availed as credit and can be utilised in paying excise duty.

CA Pankaj

CA Pankaj (Querist)

30 December 2009 Thanks for reply...

We do pay service tax under reverse charge through Bank only and do not utilise cenvat credit.
But my question is whether we are eligibile to take Cenvat Credit of Service tax paid under input GTA services on behalf of transporter availing benefit of abatement?

CA Deepak S

CA Deepak S (Expert)

31 December 2009 Please note that now 75% of value of taxable GTA service is 'EXEMPT' and it is not an 'abatement'. If you are paying service tax on input GTA service, in my opinion, you can use this amount to pay excise duty.

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