Itc on sevice tax paid to gta

As per Rule 2(l) of the Cenvat Credit Rules, 2004 -

1) There is no restriction on claiming cenvat credit on the consultancy charges paid. Hence, in my view, it can be availed.

2) Service tax paid on goods inward transportation and upto their place of removal can be claimed. Meaning, pls check regarding the outward freight paid.

1.)thank you sir,for the first point

2.) the Notification No. 26/2012- Service Tax dated 20^th June, 2012 says that the availing ITC on service tax paid on GTA in not under the perview of CENVAT Credit Rules, 2004.(serial no. 7 of the table of the above notification).....

so, how/ from where, can i know that ITC shall be taken on inward transport....?

The Notification No.26/2012-ST merely deals with the Abatement under Service Tax Law. In order to understand the meaning of input service, you should refer to the definition u/r.2(l) of the CCR, ’04 i.e.,

“[(l) “input service” means any service, -

(i)     used by a provider of [output service] for providing an output service; or

(ii)     used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,

and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

[but excludes], -

[(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -

(a)      construction or execution of works contract of a building or a civil structure or a part thereof; or

(b)      laying of foundation or making of structures for support of capital goods,

except for the provision of one or more of the specified services; or]

[(B) [services provided by way of renting of a motor vehicle], in so far as they relate to a motor vehicle which is not a capital goods; or

[(BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used by -

(a)      a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person; or

(b)      an insurance company in respect of a motor vehicle insured or reinsured by such person; or]

(C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;]”

Its as simple as such....

1.  Service tax paid to consultants can be taken as input service credit as this category of service is mentioned as "accounting" in the "input service" definition

2.  Regarding GTA,  its simple that service tax paid on inward freight can be taken as ITC but service tax paid on Outward freight cannot be taken as the "input service" definition is restriction in this regard.  Pls check in that company about "Place of removal".

Part 1 of your question has been answered, and i agree.

Regarding part 2, i.e. GTA, in my view since your client is a registered dealer and a person liable to pay freight, as per notification no. 30/2012, the service tax @ 12.36% on 100% value of GTA has to paid by your client. The abatement is not applicable to you. After payment of service tax though GAR7, input credit can be availed on the basis of GAR7 challan. 

Regards,

tax2001-it @ yahoo.com

Sir, 

Please tell me whether there is abatement for the Service Recepient,(who is one among the specified persons in the notification 30/2012) in the Reverse Charge Mechanism case of GTA, as of now....

In my view, no abatement is available to the service recipient...

Not. No. 30 uses the words 'service provider'... 

Dear All,

Abatement of 75% on the Services received from a GTA is also available to the Service Recipients.

Its a well settled principle.

What about the notification no. 30 ? 

What does it actually say...?

ABATEMENT IS FOR SERVICE PROVIDER.SERVICE RECEIVER HAS TO PAY ST AT 100% RATE

There is no point in looking at notification No.30/2012-ST for valuation purpose. In order to understand, whether the abatement of 75% is available or not, please refer to Notification No.26/2012-ST.

Notification No.30/2012-ST merely states regarding the % of reverse charge on the Service Tax liability and not about the calculation of Service Tax liability.

Mr. Manoj,

I think you are getting confused.

The notification says; "amount charged by service provider".....

The amount for services provided would always be charged by Service provider only and not by the service recipient.

How can a service recipient charge amount for receiving services?

NOtification No. 30 is for service provider not for receiver

the condition of non-availment of Cenvat credit by service provider not by service receiver.

and on outward transport Cenvat credit is not available