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Centralisation of service Tax

umashanker goenka (Finance Manager) (73 Points)

07 August 2009

we are paying the freight on purchases from branch , transfer from branch to factory and from factory to branch. so how we will calculate the service tax and where to diposit(At branch in the state of Hariyana OR At Factory in the state of Rajasthan) and can we take Cenvat Credit of service tax paid by us as a manufacturer of excisable goods. what is the complete procedure(Is it require to process any application for Centralisation of Service Tax). pls guide

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2 Replies

Satish (CA Final Student) (479 Points)
Replied 07 August 2009

Centralised Service tax registration is available only where there is a centralised billing process exists. GTA is payble by the consigner or consignee whosoever is paying freight. You can avail CENVAT credit on inward freight and where the terms of delivery on sale is door delivery, i.e. sale is completed at the door of the customer, credit of service tax on freight outward is also allowed. In your case, the service tax is payable only for GTA service, centralised registration is not applicable to you as you are paying service tax as a receipient of service. So where, the freight is payable by the Rajasthan unit, service tax on freight is also payble by them.

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S. Banerjee (Practising Cost Accountant. Core area- Central Excise. Service Tax Costing system installation including maintenance of Cost Records and Cost Audit and Management Audit mainly Revenue leakages Audit) (622 Points)
Replied 09 August 2009

Originally posted by :umashanker goenka

we have R.O.C. and Incometax in the State of Hariyana and also have a branch office in hariyana but our manufacturing unit is in Rajasthan. purchases made from the Hariyan branch and sent to factory for conversion and after receiving the converted material sales is made by the branch office.
we are paying the freight on purchases from branch , transfer from branch to factory and from factory to branch. so how we will calculate the service tax and where to diposit(At branch in the state of Hariyana OR At Factory in the state of Rajasthan) and can we take Cenvat Credit of service tax paid by us as a manufacturer of excisable goods. what is the complete procedure(Is it require to process any application for Centralisation of Service Tax). pls guide

Mr. Goenka,

You have not mentioned that where the books of account is being maintained and whether is it centralised or not?

I think the same is being maintained at Hariayana, if so you can apply for centralised service tax registration at your Hariayana office address otherwise it is mandatory to take the service tax registration at factory address.

So far as the formality of centralise registration you can see my ARTICLE submitted in this forum.

Hope this is clear to you,

Thanks, S. Banerjee