Cenvat credit of service tax paid on gta

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GSR Murty

AGM-Finance

25 Points Posted on 18 November 2011

Sir

We are the dealer in automobiles ( Two Wheelers & Four Wheelers). We pay service tax on inward trasnportation of vehicles i.e GTA after avaling abatement of 75%.. Whether we will be entitled to claim the said Service Tax as input tax credit against the service tax payable on the servicing of the Vehicles.

Also pls clarify, if yes, what is the quantum of Credit. i.e is it in proportion to the sales Vs Service or entire amount.

Also please quote any supporting Case Laws, Rules etc.,

Thanking you, in advance

Replies (2)

U S Sharma

glidor@gmail.com

21670 Points Posted on 18 November 2011

bringing two wheelers to your place is purely for sale, as it is not used as input in your service section. hence input credit inadmissible

GSR Murty

AGM-Finance

25 Points Posted on 19 November 2011

Thank you Mr Sharma.

There is one CESTAT Bangalore Judgement in case of Sheriff Motors in 2009, who is also a dealer of Two Wheelers, where in it was held that the dealer is entitled for credit of Service tax paid on GTA.

But in view of recent clarification " Exempetd service includes Trading", whether we will be able to get the said credit, if yes, should it be proportionate to the value of Trading i.e Value of Services in relation to the value of sale of two wheelers.

Pls clarify.