Service tax credit on transportation

We have Handling & Transport contractor for unloading our materials from railway wagon and transport them to designated warehouses. For this the contractor is  submitting bill for Handling charges with service tax and transportation charges.  Serivce tax on transportation is being paid  by us to the Government after claiming 75% abatement.

Now my query is that whether the service tax on Handling charges paid to the contractor can be claimed as credit while paying service tax on Transportation charges to the Government?

 

Replies (11)

no credit can be claimed .

 

Are you charging different tax for both?? As per Circular No. 104/27/2008, you should pay the service tax on whole by taking abatement of 75%. So, where is the question of credit??

As per the provisions, Service tax on GTA shall be paid in cash only.  No credit can be set off against the GTA liability.

GTA is not a Output service so no credit can be taken.

credit can be allowed  because such service tax paid is "input service" for your business.

agree with D R P it is input service for u.

Well if Your Business Comprises of Two main Activities one Transportation and another Cargo Handling ...

Law Gives abetment of 75 % on TRANSPORATION not on CRGO HANDLING Hence Credit can be taken bcoz we are deposting 100 % service tax on Cargo handling,

Yes, but remember when you are depositing service tax of Transporation only (not of handling) then you are not elligible of credit , but you get 75 % abetment.

Credit can only be utilized for handling or cargo handling service tax payable

 

Remember to maintain Seperate Income records always from Cargo handling and Transportation

 

Thanks

You have to pay tax first, after that you can take credit of same against your own output service tax (If any).

you can pay collected tax on 3-4 and take credit on 6-7 while paying you output service tax

 

Credit of GTA of freight inward is available, & Service tax paid on freight outward is to be charged to p & l.

As per CENVAT credit Rules, 2004 the balance of CENVAT credit can be utilised only for the purpose of paying Excise Duty on Excisable goods, and

paying Serivce Tax on OUTPUT SERVICE.

NOTE: OUTPUT SERVICE means any services other than transport of goods by ROAD provided or to be provided to any client, customer, etc,

CONCLUSION: you can't utilise your CC balance for paying ST on GTA Service.

providing transportation is output service for GTA but, for receiver of services it is an "INPUT TAX PAID" hence, credit should be allowed. 

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