credit of service tax paid on GTA - outward freight
This query is : Resolved
06 September 2007
A Co. having mfg units in India, is also into trading activity for the very same item which it manufactures. The co has entered into JV with those co's.
The outward freight from that JV co. to the depot of mfg co. is paid by the mfg co. The JV co. is not having any depot of its own.
Under such a situation, can this mfg unit avail CENVAT credit of service tax paid on outward freight (considered as inward freight for it) and distribute the credit to its mfg units (service tax distributor).
The outward freight from that JV co. to the depot of mfg co. is paid by the mfg co. The JV co. is not having any depot of its own.
Under such a situation, can this mfg unit avail CENVAT credit of service tax paid on outward freight (considered as inward freight for it) and distribute the credit to its mfg units (service tax distributor).
16 September 2007
Dear Sir
To claim credit of service tax paid either it should be input service tax or input duty.
What you receive is relating to 'resaleable goods'. Thus the same cannot be input duty.
Input should be relating to manufacturing directly or indirectly.
When there is no output service you can not relate your input service tax paid (as freight) to output service too.
Hence, in case of input service tax payment no matching output manufacture/ANY output service tax is there. Hence it is advisable to avoid credit taking in respect of such tax.
In contrast if you have any output service tax payable any where in India, input distribution Under Rule 2 (m) of the CENVAT credit rules 2004 is advisable. Please consider my reply in the light of recent meaningful excise audits.
To claim credit of service tax paid either it should be input service tax or input duty.
What you receive is relating to 'resaleable goods'. Thus the same cannot be input duty.
Input should be relating to manufacturing directly or indirectly.
When there is no output service you can not relate your input service tax paid (as freight) to output service too.
Hence, in case of input service tax payment no matching output manufacture/ANY output service tax is there. Hence it is advisable to avoid credit taking in respect of such tax.
In contrast if you have any output service tax payable any where in India, input distribution Under Rule 2 (m) of the CENVAT credit rules 2004 is advisable. Please consider my reply in the light of recent meaningful excise audits.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- Difference between Date of Payment and Date of Deduction?
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- GST Rate for Catering Services
- Bank details not Visible on Traces Portal
- Taxability of Partnership firm for FY 2025-26
- Cash balance limit and property purchases limit
- Can we choose not to report losses in ITR3 if they cannot be carried forward?
- Same demand raised for original as well as rectification request return
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
