Service
65 Points
Joined April 2013
As per first proviso to sub rule (7) of CCR, 2004, service recepient can avail the credit only after the payment of service tax by service receiver to the department.
In case of service is received by a person from the person who is not in taxable territory then liability to pay service tax is on service receiver as per notification no 30/2012- service tax dated 20-06-2012.
Further, service tax is applicable at the rate of 30% in case of goods transported by vessel as per notification no. 26/2012- service tax dated 20-06-2012 which can also be availed by service receiver as it is not expressly provided that such abatement shall be provided only to the service provider in the said notification.
In view of above, your query is addressed as under-
1. cargo agent can take credit of service tax paid under reverse charge on service availed from foreign shipping company (Here it is assumed that Foreign shipping company is providing taxable services from non-taxable territory) only after payment of service tax to the department.
2. cargo agent will raise invoice of cargo handeling services by adding his margin and service tax on such services provided which would be his output tax liability. As service tax paid @ 4.5% is cenvattable, It would be part of chain of CENVAT.