can we take credit on outwards freight on export?

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vishnukant tailor

se excutive accounts

30 Points Posted on 25 June 2009

We are a manufacture company and our product are 95% Export. we pay freight to transporter from our campany and warehouse to port for Export of our product and we are pay service tax to directly government. And we are claiming refund calim of service tax on outwards freight on export under notification no 41-2007.but we want to know, can we take directly credit on such freight as inputs?because we suffer lote of documentation and lote of working for refund claim

from:-Vishnukant tailor

Replies (2)

A. Kiran Kumar

Manager - Indirext Taxation

122 Points Posted on 29 June 2009

Dear Vishnukanth,

Scope of the outward transportation is limted upto the place of removal for availing CENVAT credit. If your terms of export contracts are in the basis of FOB/CIF the transportation upto the port is eligible as input service, as the owner ship of the goods still remains with you, until your goods are shipped on the board. Then the said port becomes the 'place of removal'. In this case you can avail the cenvat credit on the outward transportation upto the port.

Madhukar N Hiregange

Chartered Accountant

33545 Points Posted on 01 July 2009

The option is to see which of the export services can be exempt which you cango for refund under not.41/2007 as amended. 19 different service areas have been specified where such a benefit has been exptedned to export.