SERVICE TAX CREDIT AND LIABILITY ON FREIGHT INWARD AND OUTWARD

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vineet (Querist)
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01 August 2007 WHAT IS THE TRAATMENT OF SERVICE TAX PAID ON FREIGHT OUTWARD AND FREIGHT INWARDIN CASE WHEN THE PAYMENT OF SERVICE TAX IS MADE BY THE COMPANY AND NOT THE TRANSPORTER.WHETHER COMPANY IS ELIGIBLE TO TAKE SERVICE TAX CREDIT ON FREIGHT INWARD OR FREIGHT OUTWARD OR BOTH?

Sanjeev Kumar Varshney

Sanjeev Kumar Varshney (Expert)
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01 August 2007 Mr Vineet
Service tax paid on inward freight is fully eligible for Cenvat Credit while ST paid on Outward upto place of removal only is eligible for Cenvat Credit. It means that ST paid on freight upto Depots is also eligible for Cenvat as Depots are covered under place of removal.

You have to creat liability of ST Payable and after making payment you will be entitled for Cenvat. In case of Inward freight it is Cenvatable and in case of Outward freight beyond place of removal is an expense. The liability of ST on freight shall be paid in cash only, it is not adjustable against Cenvat of any other Service. I think your problem has been solved now.

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