Abhay (Asst. Manager) (60 Points)
10 February 2011How should Manufacturer who sells ex factory and is only assisting his customers by engaging Transporter on Customers' behalf and getting reimbursement of Outward Freight and service tax paid on customers' behalf shows it over his excise cum commercial invoice?
Will Customer be able to take service tax credit if Manufacturer shows "Freight Reimbursed" and "Service tax" on his invoice below the Product basic value+Excise+VAT/CST?
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 10 February 2011
| Originally posted by : Abhay | ||
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How should Manufacturer who sells ex factory and is only assisting his customers by engaging Transporter on Customers' behalf and getting reimbursement of Outward Freight and service tax paid on customers' behalf shows it over his excise cum commercial invoice? Will Customer be able to take service tax credit if Manufacturer shows "Freight Reimbursed" and "Service tax" on his invoice below the Product basic value+Excise+VAT/CST? |
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1) Sales are made at factory gate and transport charges paid beyond it is not an input service.
2) for the transport charges you have two options
a) paid by you and issued debit note in favor of client , in this case service tax is borne by you, no cenvat credit available to party, however in case of GTA the service receipent is tax payer,
here the legal complications will arise again for the buyer again to pay GTA, as once its paid by you , again its paid by client in books for the same service.
you can not issue invoice of GTA with service tax as service tax paid by you would qualify you as service user, not provider.
b)As the buyer is actual user and receipent of said GTA service, buyer will pay direct to transporter, pay service tax and take credit , as this service is directly related his inputs and qualify for input service.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 15 February 2011
Collect the actual freight through your sale bill by showing seperately .There is no excise duty and vat on this amount. Pay service tax on the freight amount and take the credit of tax so paid. As per the present legal position emerged form court decision, any service relating to the business qualifies as input service.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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