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Cenvat :service tax paid on inland haulage charges to trader

Stone Cold (MBA) (24 Points)

20 January 2016

Dear All As An Indian Importer, Importer pay service tax on Inland Haulage Charges while importing goods in India to ICD to Shipping Lines and Warehouse Service providers. Can a TRADER take Cenvat of above for Service tax payments to Freight Payments under "Transport of Goods By Road"? Or Is there any way to use these Service tax payments to use it as Cenvat or Pass the Tax to Manufacturer? Thanks in advance.

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Ashish Chaudhary (CA Practice ) (2209 Points)
Replied 20 January 2016

No, credit cannot be taken on services which are used in trading activity as trading is considered "exempted service" under Cenvat Ccredit Rules, 2004. Tax on GTA under RCM needs to be paid in cash.

You could consider making high sea sales to manufacturer (if entire consignment is sold as such). In that scenario, he would be making clearance of goods from customs in his name and may take the credit of service tax paid on haulage charged. In my view, no other possibility exist for transferring credit to manufacturer