Dear All,
What is the treatment of Service Tax levied on the freight paid at the time of purchase of Capital Goods. wheather we are entitle to avail 100% CENVAT Credit in the 1st yr. or 50% in the same yr and balance in subsequent year.
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service tax on Freight paid on Purchase of Capital Goods
Replies (4)
Dear friend.......so far i think the provision for availing 50% cenvat in same yr and balacne in next year is only for purchase of capital goods and not in case of services availed for acquiring the capital goods.........however if you got different opinion & convinced plz forward me also at "sanjaysangal @ rediffmail.com"
you are entitled to 100% credit in he first year itself........as this is an "input service"- as per cenvat credit rules'04..........
and it isnt bifurcated between 50% etc .....so full 100 %
thanx a lot buddy
Capital goods are generally in material form, not in service. Incase it is in service form,100% credit of service tax can be taken in same yr.
Service tax on freight cann't be capitalised, since we are availing the credit for the same.
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