Cenvat of service tax paid on inland haulage

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Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2015 Hi All

Let me know a logistic company pays service tax only on inland haulage in India while Inland Haulage has been prepaid outside india, while carrying goods. Whether Cenvat can be available thereon. If so, kindly provide the notification reference.

Thanks in advance.

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 Seeking for favorable reply

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

19 July 2024 In the scenario you described, where a logistic company pays service tax on inland haulage in India, but the inland haulage charges have already been prepaid outside India, here’s how the Cenvat credit eligibility would typically apply:

### Cenvat Credit Eligibility on Service Tax Paid on Inland Haulage:

1. **Input Service Definition**: According to Rule 2(l) of the Cenvat Credit Rules, 2004, "input service" includes services used by a provider of taxable service for providing an output service. Inland haulage services in India, which are subject to service tax, qualify as input services under this definition.

2. **Conditions for Availing Cenvat Credit**:
- **Payment of Service Tax**: The logistic company must ensure that the service tax charged on the inland haulage service within India has been paid to the government by the service provider (transporter).
- **Documentary Evidence**: Maintain proper invoices and documentation showing payment of service tax on the inland haulage services.
- **Usage in Business**: The inland haulage services should be used in relation to providing output services, which in your case would typically involve the transportation of goods or logistics services.

3. **Notification or Circular Reference**:
- There isn't a specific notification or circular that directly addresses the scenario of prepaid inland haulage charges outside India. However, the general principles of Cenvat credit eligibility on input services apply as per Rule 2(l) and related provisions of the Cenvat Credit Rules, 2004.

### Conclusion:

- **Cenvat Credit Availability**: Yes, the logistic company can avail Cenvat credit on the service tax paid on inland haulage services in India, provided all conditions under the Cenvat Credit Rules are met.
- **Documentation**: Ensure proper documentation of invoices and proof of payment of service tax on inland haulage services to support the claim for Cenvat credit.

Always consult with a tax advisor or chartered accountant familiar with indirect tax laws to ensure compliance and optimize Cenvat credit utilization based on specific business operations and transactions.

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