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S.tax credit on freight outward

soni chauhan (Service) (670 Points)

04 June 2009

can we avail credit on freight outawrd on the basis of challan which is deposited for the year 2005-06 in current year?incase of manufacturer company

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10 Replies

(Guest)

yes, you can

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Vaibhav Agrawal (MD) (58 Points)
Replied 04 June 2009

Dear Soni,

In my opinion you Can not. Unfortunately service tax credit is allowed only on inward freight & inward services. You can not claim credit on S.T. paid on outward freight, however your customer can avail. In case this outward freight is towards your consignment depot (stock transfer) than only you can avail the credit ,

ADITYA (Manager Finance) (742 Points)
Replied 04 June 2009

I do agree with Mr Rajesh the Service Tax for the FY 2006-07 can be availed .

However, Due to amendment proposed in the Budget,08 it is not permitted

ADITYA (Manager Finance) (742 Points)
Replied 04 June 2009

However, Due to amendment proposed in the Budget08, it is not permitted afterwards

Jiwan singh (service) (393 Points)
Replied 05 June 2009

You can not take credit of service tax on freight outward

You can take credit of service tax on freight outward upto place of removals

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 05 June 2009

Originally posted by :soni

can we avail credit on freight outawrd on the basis of challan which is deposited for the year 2005-06 in current year?incase of manufacturer company

Yes you can take the freight outwards for the past years based on the challans.

Annappa (Article Asst.) (41 Points)
Replied 05 June 2009

You cannot avail service tax input credit on freight outwards.

Suseendran Naidu (Finace Manager) (22 Points)
Replied 07 June 2009

STO 2009 CESTAT 513

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD

CCE Vapi

Bhilosa Tex-N-Twist Pvt. Ltd.

Date of Order: 27/01/2009

Order No. A/319/WZB/AHD/2009, Appeal No.ST/166/2008, Arising out of OIA No.KRS/196/VAPI/2008, dt.22.7.08 passed by Commissioner of Central Excise & Customs (Appeals),Vapi

Coram:

Mr. B.S.V. Murthy, Member (Technical)

Represented By:

Shri Sameer Chitkara, SDR for the Appellant

None - for the Respondent

Headnotes

CENVAT Credit: Service tax on outward transport service can be paid out of the Cenvat credit of
service tax available in the credit of account.

CASE

[Per: Mr. B.S.V. Murthy] - The short issue involved in the present appeal is as to whether the service tax on outward transport service can be paid out of the Cenvat credit of service tax available in the credit of account of the other respondent. The Commissioner (Appeals) has held that the procedure followed by the respondent in paving the service tax due on the output services by utilization of Cenvat credit is correct, in view of the decisions of the Tribunal in case of M/s Visaka Industries Ltd. 2007 (8) STR 231 (Tri-Mum.) = STO 2007 CESTAT 184 and M/s R.R.D. Tex Pvt. Ltd. 2007(8) STR 186 (Tri-Chennai.) = STO 2007 CESTAT 427 I find that both the decisions are applicable to the facts of the present case and in both the decisions, the Tribunal has held that the manufacturers are not hit by the definition of output service and they fall under the definition of the procedure of taxable service. It has also been held that the Goods Transport Services (GTA) is considered to be the output service where the person is liable for service tax.

2. In view of the fact that the decisions of the Commissioner (Appeals) are based on the
Tribunal’s decisions applicable to the facts of the case and Revenue's appeal is based on
the ground that these decisions have not been accepted by the Revenue and the appeals
have been filed. I find no merit in the appeal filed by the Revenue and accordingly dismiss
the same.

(Pronounced in Court)

CASE CITED :

(1) R.R.D. Tex Pvt. Ltd. V. Commissioner Of C. Ex., Salem : STO 2007 CESTAT 427

(2) Commissioner of C. Ex., Nagpur v. Visaka Industries Ltd. : STO 2007 CESTAT 184

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 09 June 2009

The matter on outward freight was decided in the case of ABB, India Cements and others in the Bangalore Tribunal which observed that the phrase used of "upto the place of removal" didi not restrict the eligibility and whether or not thew same was included in the assessable value of the goods, the ST paid on freight would be allowed.