whether cenvat credit of transport freight

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mukesh (Querist)
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15 January 2010 Hi Everyone

I am a account officer in the company and our company purchased raw materials and we deposit service tax 2.575 % (after abatement) on the freight (which is part of our carriage inward), as we registered in service tax department in the category Transport agency. on the other hand we pay service tax on advertisement & Others (which is the part of our sales promotions)now i want to know whether i take cenvat credit on the advertisement bill and adjust the cenvat credit balance with the payment of transport service tax.

RAHUL GARG

RAHUL GARG (Expert)
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15 January 2010 First of all i want to clear one thing that the service tax which u are depositing on inward freight is just a shifting of responsibility from transporter on ur company. It doesn't mean that ur company becomes a service provider due to this. Hence the service tax which u are depositing on freight will also becomes ur input like service tax on advertisement. U cannot claim input on advertisement bill agt payment of service tax on freight. Technically it means Reverse charge under service tax i.e. in case of transport due to a large unorganised sector govt. has replaced service user on the place of service provider for deposit of service tax. The nature becomes a little bit like TDS. However u can claim input of both service taxes agt any other output service liability or excise liability.

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