Cenvat credit on gta services

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Praveen Kumar Tatuskar

Sr. Manager

23 Points Posted on 21 February 2013

Dear All,

As a service recipient of GTA service, we use to pay service tax on GTA services after deducting abatement @ 75% on it through challan to Government account and the same is being claimed as input credit against payment of Central excise duty. After introduction of reverse mechanism with notification no.30 dated 20.06.2012 can we claim input tax credit as a service recipient on pay of service tax on GTA services after deducting abatement towards payment of Basic central excise duty.

T.P.Kumar

Replies (3)

Abhisek Rungta

PRACTISING CHARTERED ACCOUNTANT

170 Points Posted on 21 February 2013

Yes you can claim for Input Services like Freight Inward Services .

Praveen Kumar Tatuskar

Sr. Manager

23 Points Posted on 21 February 2013

Dear Abhisek Rungta,

Thanking you, for your clarification further could you provide me a information regarding under which section of service tax it is eligible to claim the same for future reference purpose.

Thanking you,

T.P.Kumar

Manoj Agarwal

Service Tax Consultant Rourkela Service

2755 Points Posted on 24 February 2013

Dear Mr. Praveen,

In my view, the abatement available under notification no. 26/2012 is available only to the service provider and not to the service receipient. So, if you are liable to pay service tax under reverse charge as per not. no. 30/2012, then you should pay 100% tax @ 12.36% on freight paid.

As per Rule 7 of Point of Taxation Rules, 2011, for service receiver, the point of taxation is the date of payment to the service provider. So, once you pay freight to the transporter, you are liable to pay tax on the 5th/6th of the following month/quarter as per Rule 6(1) of the Service tax Rules, 1994. After paying the tax though challan, you can claim credit of the same to be utilized against any output services.

Regards,

tax2001-it @ yahoo.com