Service tax on freight

This query is : Resolved

sunil babanrao shahagadkar (Querist)
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19 February 2012 a manufacturing company can get service tax set off on freight charges inward and outward. please explain with examples

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 February 2012 Inward and outward transportation is covered under the defination of "INPUT SERVICES". The definition of input service includes "inward transportation of input or capital goods and outward transportation upto the place of removal. Hence inward freight of only inputs and capital goods can be eligible for availing cenvat credit. Further, as per Rule 2(k), input means goods used IN OR IN RELATION TO manufacturing of final products. Therefore, if any goods which is not used in or in relation to manufacture of final product if transported inward then service tax paid on such inward transportation cannot be taken for cenvat credit.

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