service tax credit on freight for door delivery type order

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Ketan Shah (Querist)
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25 March 2008 Our customer has given us written purchase order on door delivery basis. Our selling rate includes freight component & we charge on basic+ED+VAT basis.
For freight charges which we pay to GTA, can we claim credit of service tax paid on such freigth charges? (75% abatement considered at the time of servcie tax payment).

annapurna

annapurna (Expert)
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28 March 2008 Your company cannot adjsut the CENVAT credit for the payment of service tax on frieght. Your company has to pay the service tax on 25% of the gross amount of frieght and after payment of service tax, such service tax paid can be part of CENVAT credit. Secondly through the latest amendment in budget 2008, the service tax is to be paid on 25% of the gross amount charged. The conditions as applicable in Notification 1/2006 is not applicable to GTA service