Service tax cr. on gta

This query is : Resolved

CA. Prem Niwas (Querist)
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16 March 2013 Whether service tax credit allowed ? If service tax paid on GTA(Reverse charge) for procurement of Capital goods for the purpose of civil structure ?

Sumit Grover

Sumit Grover (Expert)
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16 March 2013 Assuming that you are a service provider(& not the manufacturer) & paid GTA under reverse charge.

It shouldnt be allowed in my opinion, since you are using the GTA service for procurement of Capital goods....whereas the definition of Input service as per Rule 2(l) of CCR,2004 reads as follows:
"Any service used by provider of output service for providing output service". But in this case, the GTA service is not used for any output service...It is just used for procurement of capital goods.

Please wait for other expert's opinions as well

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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16 March 2013 Cenvat Credit is available on input goods, input services and capital goods. Manufacturer as well as service provider will be eligible to get Cenvat credit of ‘input services’.
Definition of ‘input service’ has been changed w.e.f. 1-4-2011. The new definition is significantly different from the earlier definition of ‘input service’.
Rule 2(l) of Cenvat Credit Rules (as effective from 1-4-2011), defines ‘input service’ as follows –
“Input service” means any service, -
(i) used by a provider of taxable service for providing an output service; or
(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,
and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services,
"inward transportation of inputs or capital goods and outward transportation upto the place of removal.

Hence Allowed.

Regards,
https://ayushagrawal.wordpress.com

CA. Prem Niwas

CA. Prem Niwas (Querist)
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16 March 2013 Dear we have transported TMT bar for Project civil work, can i take Cr. on Service tax paid on such transportation

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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16 March 2013 yes allowed.

CA. Prem Niwas

CA. Prem Niwas (Querist)
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16 March 2013 Thanks Ayush ans Sumit.

we expect reply from more expert

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