St input on gta

This query is : Resolved

CA SAI RAVI PRAKASH (Querist)
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06 November 2014 Hi all,

If abatement of 25% is claimed on GTA services then we can't take Input credit. Is it correct, Please clarify.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 November 2014 Now the general rule is that, the cenvat credit is not available when we are providing services availing the benefit of abatement. But this is applicable only on service provider and not on service recipient. Therefore, the cenvat credit of GTA service is available to a service recipient even though the service tax under reverse charge has been paid after claiming abatement of 75%.

CA SAI RAVI PRAKASH

CA SAI RAVI PRAKASH (Querist)
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07 November 2014 But, In abatement notification they didn't mentioned it will not applicable for RCM. Please clarify

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 November 2014 11.1 A manufacturing company is paying freight on transportation of raw materials upto its factory. Can it avail abatement and cenvat credit simultaneously?
Yes, any service receiver can avail abatement and pay tax @ 3.09% and still take cenvat credit of such tax, if the GTA service is otherwise eligible as ‘input service’. In case of outward freight, cenvat credit is not available for freight paid beyond the ‘place of removal’. The above condition in Para 10.3 restricting the cenvat credit is for the service provider using any inputs, capital goods or input services for providing such services.
- See more at: https://taxguru.in/service-tax/service-tax-goods-transport-agency-gta-guide.html#sthash.2lFI0xQr.dpuf

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