Input Credit on 25% Service Tax paid on Carriage inward

As per new notification Service Tax Exempted up to 75% on GTA and we have to pay just 25%

Can we get input credit of 25% service tax paid GTA?

Replies (8)
Originally posted by :Yogesh Uttekar
" As per new notification Service Tax Exempted up to 75% on GTA and we have to pay just 25%
Can we get input credit of 25% service tax paid GTA?
"


 

yes you can get it

75% abatement is available even earlier.  However, from 01/03/2008 Credit is not available.

yes you can take credit of 25% which you have paid...

 

11. AMENDMENTS IN CENVAT CREDIT RULES, 2004:


11.1 Service tax payable on GTA service shall be only on 25% of the gross
amount charged as freight. GTA service providers shall not be allowed to avail
input credit under Cenvat Credit Scheme. Rule 2(p) is being amended so as to
exclude goods transport agency service from the scope of “output service”
.

In short, you have to pay tax on 25% of the gross amount. In case of 'inward transportation' you would be entitled to Cenvat Credit of the tax paid. In case of 'outward transportation', there has been a dispute.

Prior to March 2008, the definition of 'input service' included services used in relation to clearance 'from the place of removal'. It was claimed by the trade that this covers outward transportation. The government has changed the words to 'upto the place of removal'. Therefore, the earlier argument does not remain available.

However, one venue still open to argument is that the definition of 'input service' includes services used in relation to activities relating to business. It is to be seen what view finally prevails in Tribunals and courts. If they consider the outward transportation to be an activity relating to business, the credit could be allowed.

Can we liable to pay service tax on expenses reimbursed to the C&F Agents

Yes. Without doubt.

Thank you Sanjay

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