Dear Sir / Madam
Our company is mainly engaged in the business of trading of various industrial products. It is registered as a "First Stage Dealer" under Central Excise Act. In addition to this, its sells goods on commission basis and pays service tax on its output service.
It pays freight charges for transport of Goods. In relation to this its pays Service Tax as per reverse charge mechanism. However company has not maintained separate books of accounts specifying that how much Freight charges are for Trading Activity and how much for Consignments / Service Activity.
My Question is
- Whether company can take input tax credit of service tax paid under reverse charge mechanism (Freight Charges) for its output Service ?
- Whether total credit will be available irrespective of Freight charges for "Trading Activity" or "Service Activity" ?
- Whether company is required to maintain separate books of accounts for availing of credit ?
CAclubindia
