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Credit of gta after taking abatment

CA Dipak (achiever) (238 Points)

13 February 2012

x co ltd. is manufacturer.he received input(raw material) on which freight is paid by x co. ltd. they take abtement 75% and paid tax on 25% taxable value.now after payment same as service tax they want to take its credit.can they do so.?

eg.

freight inward 100000*25%*10.3% : 2575 s.t paid (wiout utilising cenvat credit means in cash/bank)

now can 2575 credit be taken as input service for manufacturer.

plz let me know anybody do like this ,is there any case law or something?

same issue with freight outward bt place of removal is consignment agent premises.hence, its include in input service defenation.

plz guid me member

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1 Replies

Rakshit (practising) (338 Points)
Replied 13 February 2012

Credit of the inward transportation of goods is available as it has been included in the definition of CCR, 2004 itself which is very clear therefore, there is no need for any case laws to justify it. As regards outward transportation of goods it is a debatable issue. Since the defintion of input service has undergone a change w.r.t. outward transportation of goods from 01.3.2008, therefore, credit on outward transportation of goods is available before 1.3.2008 but the credit on outward transportation of goods after 1.3.2008 is still not settled. Though, in my opinion it is available but still to avoid any litigation, it should not be taken until it is settled by a judicial pronouncement.