Service tax on inward freight ->out sourcing
This query is : Resolved
RAMESH SALIAN
(Querist)
09 June 2015
QUERY: 1
Company A is a manufacturer and Company B is a job work (out sourcing) company.
Company A & Co.B has the agreement of JOB WORK Company A provides Raw material to Company B. Company B manufacture the final product with Co.A logo and returns to Co.A.
Here Company B charges Conversion Charges.
On receipt of Raw material,Company A is availing the cenvat indirectly through CO.B{ Excise regn in the name of Company B and onus of paying E.Duty (after adjusting the cenvat on behalf of Company A) is on Company B.
Here inward freight on Raw material reimbursement is made by Company A.
Whether Company A can avail the service tax benefit on this Freight on Raw materials which are directly going to the factory of Company B.
QUERY: 1
Company A is a manufacturer and Company B is a job work (out sourcing) company.
Company A & Co.B has the agreement of JOB WORK Company A provides Raw material to Company B. Company B manufacture the final product with Co.A logo and returns to Co.A.
Here Company B charges Conversion Charges.
On receipt of Raw material,Company A is availing the cenvat indirectly through CO.B{ Excise regn in the name of Company B and onus of paying E.Duty (after adjusting the cenvat on behalf of Company A) is on Company B.
Here inward freight on Raw material reimbursement is made by Company A.
Whether Company A can avail the service tax benefit on this Freight on Raw materials which are directly going to the factory of Company B.
Santosh Kalburgi
(Expert)
10 June 2015
Hello Ramesh,
COmpany A can avail the credit of ST on freight inward if the Transport bill is billed to company A.
Co. A is also eligible to take ST on freight inward on transport of those converted materials brought from co. B to Co. A.
Regards,
Santosh G Kalburgi
9742022309
COmpany A can avail the credit of ST on freight inward if the Transport bill is billed to company A.
Co. A is also eligible to take ST on freight inward on transport of those converted materials brought from co. B to Co. A.
Regards,
Santosh G Kalburgi
9742022309
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RAMESH SALIAN
(Querist)
10 June 2015
can you provide some proof /notification covering this transactions.
Santosh Kalburgi
(Expert)
10 June 2015
It is as per the cenvat credit rules, if company A is billed for the transport and the payment is made by it then it is within the scope of the cenvat credit rules. you can refer the Cenvat credit rules for cenvat credit of GTA.
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