Service tax input credit
Querist : Anonymous
Querist : Anonymous
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### Can a trading unit claim service tax input credit on shipping line charges?
**Yes, subject to conditions:**
1. **Input service definition:**
Shipping line charges fall under the category of input services used in relation to the business of the service provider or manufacturer (in this case, the trading unit).
2. **Usage for taxable services:**
The key requirement for claiming input credit is that the service tax paid on these shipping charges must be related to the activity of providing taxable services or manufacture of taxable goods.
3. **Trading unit & input credit:**
* If the trading unit is paying service tax on services related to imported goods (like shipping line charges), and
* The trading unit is also engaged in providing taxable services or manufacturing goods which are taxable,
then the service tax paid on shipping charges can be claimed as input credit.
4. **Restriction:**
If the trading unit is only engaged in trading (which is not a service or manufacture), then generally **service tax input credit on such services may not be allowed**, because trading is not a taxable service and no output service is provided on which the credit can be adjusted.
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### Summary:
* **If the trading unit has taxable service output or manufacturing output**, it can claim service tax input credit on shipping line charges related to imported goods.
* **If purely trading without taxable output service or manufacture**, input credit may not be available.
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