We are manufacturing company and are also liable to pay service tax on freight on inwards and outwards service. We have some doubt regarding availing of cenvat credit and other procedure issues which are as follows:-
1 We are paying service tax on freight of input material for transportation. Our transporter raised invoice against freight of raw material. We have own mines of raw material from where transporter lifted the raw material and unloaded at our factory. Our transporter is also mine owner they have also supplied raw material from their mine and raised invoice against material plus freight but do not issued consignment note. The question whether consignment notes is mandatory for GTA.Can we treat as other mines owner as GTA if they are suppler of raw material and transportation work been done by them in their own vehicle or hiring other transporter vehicles.
2 We have raised the invoice to our customer for sale of against final product. We have raised Bill Receivable against sale of final product to the our bank and bank has paid realized from the customer after convene of customer but bank has credited the payment after charging discount and other charges which inclusive service tax charges. Can we avail the cenvat credit on this amount service tax charged by bank on bank charges. What is possibility regarding this issue either it is output service or input service.But this service related to directly to our final product sale.So it should treated as input services or output services.
3 In case of lot of small value of inventory supply by vendor than we do not know and do not approach to transport/ supplier due to small amount freight or non regular of transporter from supplier and we have paid service tax on freight and party also paid the service tax on freight in this circumstance what is our liability or procedure.
4 When some time our supplier of supply the inventory through tempo/ other (rixa) than it is covered in GTA category or not.
5 We have also received raw material through import.We have paid service tax on freight amount to India territory to our factory.But our cargo handling agency freight paid to freight forwarder of other country for material shipped from other country to our Indian custom ports and same amount reimburse by us. As per definition of Rule 2 (d) (iv) we are liable to pay service tax on this ocean freight amount.
6 In our company some of scrap arise due to manufacturing process and some scrap arising from Plant & Machinery which is replacing other equipment,Machinery,parts and pipes this scrap not arising due to process of Manufacturing but it is time to time replacing parts and machinery due not stopped of plant.The question is that wheather TCS is applicable on this scrap due replacing of equipment,machinery,parts or pipes. This scrap not usable for us but vendor can used or brack sale other mode.
As per definition of scrap in Income tax act ‘waste and scrap from the manufacture or mechanical working of material’ which is definitely not usable as such because of breakage,cutting up,wear up and other reasons.
Can we does not collected tcs on scrap sale whose does not arise from manufacturing process or not mechanical works.
CAclubindia
