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Cenvat Credit in case of GTA

Balveer Singh (BUSINESS) (35 Points)

28 March 2009

A company received service from GTA and company want to avail input Cenvat Credit (25% of total service Tax. )in this case a company can claim of Credit or not

Regards

Balveer singh

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6 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 28 March 2009

Yes, if the GTA is an input service.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 30 March 2009

GTA services are input services. The same couldbe broken into 3 segments as under: a. GTA service for receipt of materials - No doubt credit available b. GTA service for intermediate movement to job workers, between plants/ depots - No doubt available c. GTA services for despatches to cusotmers - There is some doubt due to the defintion of input services wherein the transportation upto the place of removal has been metnioned. This portion maybe deferred or aviled and reversed under protest. Once the matter is finally decided then only matter would be clear.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 30 March 2009

GTA for outward transport till point of removal is permissible.

The place place of removal has been defined in explanation to Section 4 of the Central Excise Act. It means any place where goods are being sold by the assessee. When the assessee is paying freight on otward trasport till the doorstep of the buyer, it means that the goods are being sold at the doorstep of the buyer, and the doorstep of the buyer becomes a place of removal. In that case credit till doorstep of the removal is permissible.

sunil (accountant) (90 Points)
Replied 03 April 2009

Dear Sir,

I want to ask that I have Cenvat Input about 3 Lacs can I adjust The GTA Liability (After Abatement 25% Service Tax) through this 3 Lacs.

Please Tell me.

My E-mail id. is = sunil_kumar10520 @ yahoo.com

Venkatesh Gupta (Jr. Manager Finance) (77 Points)
Replied 03 April 2009

Dear Sunil,

As per the provisions, service receipient has to pay service tax first and claim the same for cenvat credit. If u have already 3L cenvat credit , I believe we cant adjust the same with the liability which is arisen due to availed service from transport agency.