Credit of service tax paid on outward freight
This query is : Resolved
14 November 2009
Credit of service tax paid on transporattion facilities used for moving FG from factory to factory depot is available, But what about service tax on GTA used for supply of material to customer at theirt warehouses. Please note that my client is showing freight charges seperately in invoices and also the freight amount is included in the assessment value for excise duty.
15 November 2009
read by this link
https://www.caclubindia.com/forum/message_display.asp?group_id=55199
https://www.caclubindia.com/forum/message_display.asp?group_id=55199
15 November 2009
I have studdied the link give below: https://www.caclubindia.com/forum/message_display.asp?group_id=55199
Now the scene is that transportation cost is included in the sales invoices, and till the delivery at customer client is responsible, hence as per sale of goods the ultimate sale will be at customer factory, but i could not fix the sales point in central excise act 1944. Please reply
Thanks
Now the scene is that transportation cost is included in the sales invoices, and till the delivery at customer client is responsible, hence as per sale of goods the ultimate sale will be at customer factory, but i could not fix the sales point in central excise act 1944. Please reply
Thanks
01 December 2009
The LB of the CESTAT observed that credit on outward frieght would be available. Please see the judgement and intimate the dept on the possibility before availing the credit.
24 April 2010
Please read master excise circular 96,97/2007dated 23.08.2007 wherein you will get answer to your query specifically. just keep in mind you have to pay service tax through cash only as it will not be considered as output service being specifically excluded.
Extract of the Circular for your referece:
It is, therefore, clear that for a manufacturer /consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the ‘place of removal’ does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract /agreement (i) the 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 door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place.
Extract of the Circular for your referece:
It is, therefore, clear that for a manufacturer /consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the ‘place of removal’ does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract /agreement (i) the 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 door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place.
24 April 2010
Sorry by mistake put as excise circular...it is master service tax circular.
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