cenvat credit on freight outward

This query is : Resolved

aneel (Querist)
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01 July 2010 Dear all,

my client is delivery goods upto place of customer
for such he charging frieght separtely in the invoice and pay service tax separately
whther on such payment can we claim cenvat credit of service tax
or can we claim abatmentand pay ST instead of Setoff

Shyam Lal Naik

Shyam Lal Naik (Expert)
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01 July 2010 The law on this count is not yet settled. The favourable decision in the case of ABB ltd., is under challange in the High Court.

If you can fight, you can take the cenvat as in your case the customer's doorstep is the place of removal.

What is meant by abetment in your query is not clear.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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01 July 2010 IF SERVICE TAX CHARGED BY YOUR CLIENT IS FULL RATE OF TAX i.e 10.30% (wihtout taking abatement), then you can take cenvat credit of such freight because for you this freight inward.

If he is charging 25% of 10.30% i.e availing abatment. then you can't take credit of it.

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Ram Avtar Singh

Ram Avtar Singh (Expert)
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01 July 2010 Service tax on outword cartage not cenvatable.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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01 July 2010 The person who is purchasing the goods , for him frieght charged by supplier will be freight inwards, for which credit of service tax can be taken if he has charged full rate of service tax.