13 June 2009
In respect of GTA , Sponsorship etc, the service receiver is liable to tax . Can the service receiver claim credit of the service tax so paid by him in cash. what about service tax paid on import of services?
In respect of service tax collected from associate companies, payment has to be made on accrual basis. however can service tax paid to associate companies be claimed as credit on associate basis?
14 June 2009
Yes, service tax paid in respect of GTA ( for inward transportation + outward transportation upto the place of removal),Sponsorship services(because advertisement and sales promotion expenses are categorically included in the definition of "Input Service") are eligible credit and can be utilised for payment of own tax liability.
Even cenvat credit of service tax paid under reverse charge mechanism on import of services can be taken if the services imported qualify as input service.
In case of transaction between associated enterprises, payment of service tax made on accural basis is eligible credit.
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