27 November 2009
A Chemical Manufacturing company has paid outward freight for their final products delivered up to the customer's place. The transporter has claimed Service Tax for this outward freight charges, which the company ignores to take cenvat credit. The company has also paid cash as service tax for the transporters who are not charged service tax on their bills towards this outward freight. Please clarify, whether the company is eligible to take credit for the service tax paid by cash as well as on bills for the outward freight.
Please note that the company has also opted abatement on GTA inward services for the service tax payment i.e It simply ignores the bills which are claimed service tax and calculate the total of the bills which are not paid service tax and ST paid by cash @ 10.3% on 25% of this calculation and take it as Cenvat credit.
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