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Regarding central excise cenvat credit

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chandru

Manager-Finance

22 Points Posted on 02 October 2011

Dear All,

I have an doubt on taking service Tax credit on Outward & Inward Transportation of Exports and Imports, There is service tax on the Bill of Transporters in both the cases.

whether we can take the both as cenvat Credit.

and also one more thing, For outward transport whether we have to pay the service tax to Dept on 25% of Invoice value of Transporter and , y we have to pay service tax to the dept as we are paying to the Transporter Directly.

Plese clarify, or any one form chennai pls give me ur number.

Regards

Chandru

Replies (1)

Manoj BG

Tax Professional and in Service

1637 Points Posted on 02 October 2011

Regarding transportation, you as service receiver (If you are covered under specified person), you are the only person liable to pay service tax irrespective of the fact that it was inward or outward transportation. Hence, you dont pay service tax to transporter if he has charged the same in bill.. Further, service tax law very clearly demarcated person responsible to charge and pay service tax. In case of GTA, it clearly specifies service receiver would pay service tax.

Secondly, in case of service tax on inward and outward transportation of import and export, cenvat credit would be allowed only for service tax paid on inward transportation of imports and cannot be allowed on outward transportation of exports coz as per cenvat credit rules 2004, no credit would be allowed on exempted goods and services, since exports deemed to be exempted. hence cenvat credit would inadmissible.