Service tax credit.

Save Share

This query is : Resolved

Yash saxena (Querist)

19 February 2012 1> Can service tax credit be availed on the payment of service tax on freight (GTA) to a Service provider ( who pays on our behalf) and charges on us in invoice?

2> Can service provider take the credit? and if he takes it How can we know the service provider has availed the credit on service tax paid by him on our behalf?

CA Sumat Singhal

CA Sumat Singhal (Expert)

19 February 2012 1> the amount of service tax paid on freight shall be available as cenvat credit for payment of any duty of excise on final product or service tax on any output service.

But pl. note that such service tax paid on freight can not be allowed as cenvat credit for service tax payable on other freight payable by the consignor or consignee as GTA is not a output service for him.

GTA remains to be an input service for him, but because of reverse charge mechanism consignor or consignee becomes "person liable to tax" and hence tax must be paid in cash.

2> no need of 2nd one

Yash saxena

Yash saxena (Querist)

20 February 2012 Thank you for the reply.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now