Dear Sirs/ Experts
As the Service tax Input can be availed on the service tax paid on transportation of goods , Can ST Input credit be availed in case if the ST is paid on transportation of finished goods also in case if the transport is to
a) Godown of the company ?
b) to the customer ?
will it be treated as an input service,can the Input bs availed.
dear krishna,
service tax input can be availed only in case of freight outwards not freight inwards...also read the notification under goods transport agency
till the goods are despatched to customers place u cn avail credit
Transpotation up to place of removal is allowed. If you are stock transfering to godwon for efecting sale thereat, credit may be allowed. Similarly for sale to customers, if sale is for delivery at customer's premises assuming the risk of transportation, then you can say that customer's premises is the pace of removal.
Dear Nethikrishna,
As per your query Cenvat credti can be taken for sure upto the godown but whether the cenvat credit can be taken upto the place of customer or not is still not clear.
As the definition of Input service specifically mention
Its better not to take the cenvat credit.
Regards
CA AMIT MEHTA
In addition to above mentioned comments
There is Master circular no. 97/8/2007-S.T. dated 23-8-2007 which clarifies the issue
Please go through the relaevant pharse of the relevant circulr as mentioned below
"HOWEVER THERE MAY BE SITUATIONS WHERE THE MANUFACTURER / CONSIGNOR MAY CLAIM THAT THE SALE HAS TAKE PLACE AT THE DESTINATION POINT BECAUSE IN TERMS OF SALE CONTRACT/AGREEMENT
i) Ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his doorstep.
ii) the seller bore the risk of loss of damage to the goods during transit to the destination
iii) the freight charges were integral part of the price of goods""
So the cenvat credit can only be availed when above mentioned 3 conditions are satisfied. In relation to condition no. (iii) the freight must be included in product cost while calculating the excise duty payable.
Regards
CA Amit Mehta
CAclubindia
