Service tax credit.
This query is : Resolved
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?
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?
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
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
20 February 2012
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