CENVAT credit on outward transpotation

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This query is : Resolved

Aditya M (Querist)

28 February 2008 Sir,
My querry is with regard to the availabilty of CENVAT credit to companies who provide outward transportation to distributors after the sale is made in their distibution centres. Can outward transportation be treated as input service? As per notification, the liability to pay service tax is on the receiver of service for goods transport by road. if the company is required to pay the service tax to the govt, can it claim input tax credit on teh service it has availed and paid tax on? If yes, how will this be taken?

Badri Kharat

Badri Kharat (Expert)

28 February 2008 hi aditya - in respect of outward transportation sec.2 (l) gives defination of input services, is important to interpreat and also u can rafer case of in re NHK springs Ltd. which is under allegation but you can use it for interpritation only

Dayal

Dayal (Expert)

28 February 2008 Hi aditya,

Service tax on outward transportation is eligible upto the place of removal.

If your are transfering your goods to a hub or a cfa for further sale to distributors then cenvat credit of freight from the place of removal upto the hub or Cfa can be claimed as inward freight since it is not in relation to sale of goods.

Hope this clarifies your doubt

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