04 August 2009
We are a manufacturing company. One of our customer insists us that freight amount and the service tax on freight should form part of the commercial invoice. The freight bill is sent by the transporters to us and we remit the service tax due on it to the Government. Please advice us whether we can transfer the service tax paid by us to our customer through the commercial invoice.
E.g Format of Invoice Basic value xxxx Add : Excise Duty xxxx Total xxxx Sales Tax xxxx Freight charges xxxx Service Tax xxxx Grand Total xxxx
04 August 2009
Recently tribunal has held that, outward transportation, being an activity in relation to business, service tax paid on freight charges for outward transportation is an input service eligible for Cenvat.
In case, it is found that, you can not transfer as above, you can take cenvat credit.
It is an alternative solution, not a direct answer to your query.
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