automobile dealer

No.

The service tax paid on freight paid is under REVERSE CHARGE.

I think it cannot be sett off against any service tax liability ion account of output services.

Regards

The incoming GTA ST even if paid on reverse charge is available as credit agianst the servcing ST as it is used for business and without the sale of the vehicles the service income would not arise. If I am not mistaken the Tribunal has specifically held so. 

The service tax credit can be avaield on the input GTA services. However in case of automobile dealer, he cannot claim the credit for transportation of vehicles to the showroom as the same is not an input service for providing any output service. The transportation is done for selling the vehicle to the ultimate customer.

Hope the same replies your query.

Thanks

I am agreeing with Ms  Deepti. Most of the automobile dealers are purchasing the vehicle at door cost. They are not paying the frieght charges directly to the Logistic peoples. Vehicle value is inclusive of Frieght hence automobile dealer cannot cliam CENVAT Credit on frieght. 

If the automobile manufacturer raises a service tax invoice on the dealer, showing freight cost and service tax separately on the invoice, can the dealer claim input credit on the service tax component ?

Department may contend that the inward trasportation is a service directly relatable to the trading activity which is not a taxable service and hence the GTA service is not input service for the vehicle servicing activity. As Madhukar sir says we can argue that without trading there is no vehicle servicing. If the amount is materials you can take the credit and fight it out.