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Gta as input service for renting of imm. property service?

Shashi Bhushan (Learner, Jalandhar) (996 Points)

26 May 2012

Assessee is a manufacturing company and a private limited company. it owns a space which it has given on rent and paying service tax. On manufacturing operations it is incurring some freight exp on which the comapny is paying service tax on reverse charge. we all knows that GTA Service tax can be claimed as cenvat as it is input service.

my Question is can it be claimed as Cenvat for paying service tax on Immovable property. Renting is only Outpur service for co.

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9 Replies

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 26 May 2012

Originally posted by : Shashi Bhushan
	Assessee is a manufacturing company and a private limited company. it owns a space which it has given on rent and paying service tax. On manufacturing operations it is incurring some freight exp on which the comapny is paying service tax on reverse charge. we all knows that GTA Service tax can be claimed as cenvat as it is input service. my Question is can it be claimed as Cenvat for paying service tax on Immovable property. Renting is only Outpur service for co.

No, Cenvat credit can not be taken as there is no nexus between input service and output service.

FinsQ (service provider) (54 Points)
Replied 26 May 2012

Definiton of input service is divided into two part..

1) means...."in or in relation to providing output service"

2) includes...***************************************************, "Inward transportation of inputs or capital goods and outward transportation up to the place of removal"

So if freight charge is relate ]d to inward transportation thn credit can be availed and utilise for the payment of serrvice tax. but is frieght is for outward tarnsportation thn credit can not be availed..!!

FinsQ (service provider) (54 Points)
Replied 26 May 2012

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Shashi Bhushan (Learner, Jalandhar) (996 Points)
Replied 26 May 2012

Yes there is no nexus between Freight and Immovable property. because of Freight is for the purpose of Manufacturing process relating like delivery of goods to the factory or to the customer.

But immovable proerty is away from the factory premises. and it is given on rent for shoping complex.

Now i too think that Freight can't be claimed as Cenvat for this output service.. Thanks Pinky... good luck..

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 26 May 2012

Thanks for goodluck....

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Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 26 May 2012

It cannot be claimed.

Shashi Bhushan (Learner, Jalandhar) (996 Points)
Replied 26 May 2012

Just came to know about this new Point.. In my case no need to Pay ST on GTA as assessee is exporter and covered under following exemption notification.

click to download this article:

vkcca.my88.in/vkcca/lt.php

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(Guest)

YES THERE IS NO LIMITATION AS TO THE USE OF CENVAT CREDIT WHICH IS IN THE NATURE OF SERVICE TAX FOR PAYING ANY TYPE OFSERVICE TAX. YA CAN BE UTILISED FOR THE PAYMENT OF SERVICE TAX ON IMMOVABLE PROPERTY

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 May 2012

when the company is engaged in manufacturing activity and claiming input credit of ST means the company is liable for Excise payment, claim the input credit under the excise payment and dont relate it with renting services, as at the time of audit they will establish that GTA services are not related with renting services and they will disallow it.