Service tax input credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2011 Whether we take input credit on service tax on trading unit related to import purchase and sale of goods and service tax paid to shipping line charges then such trading unit can claim input credit under service tax

Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2011 have any answer???

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

24 July 2025 Regarding your query on **input credit of service tax paid on shipping line charges** related to a trading unit engaged in import and sale of goods:

---

### Can a trading unit claim service tax input credit on shipping line charges?

**Yes, subject to conditions:**

1. **Input service definition:**
Shipping line charges fall under the category of input services used in relation to the business of the service provider or manufacturer (in this case, the trading unit).

2. **Usage for taxable services:**
The key requirement for claiming input credit is that the service tax paid on these shipping charges must be related to the activity of providing taxable services or manufacture of taxable goods.

3. **Trading unit & input credit:**

* If the trading unit is paying service tax on services related to imported goods (like shipping line charges), and
* The trading unit is also engaged in providing taxable services or manufacturing goods which are taxable,

then the service tax paid on shipping charges can be claimed as input credit.

4. **Restriction:**
If the trading unit is only engaged in trading (which is not a service or manufacture), then generally **service tax input credit on such services may not be allowed**, because trading is not a taxable service and no output service is provided on which the credit can be adjusted.

---

### Summary:

* **If the trading unit has taxable service output or manufacturing output**, it can claim service tax input credit on shipping line charges related to imported goods.
* **If purely trading without taxable output service or manufacture**, input credit may not be available.

---

Would you like help with specific case references or legal provisions for this?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now