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Service Tax Credit

Rohit (Accounts) (23 Points)

01 November 2007

We r a manf. unit and we r liable to pay tax on Carrige Inward & Carriage Outward.

In this new form of Service Tax there is Credit Taken column for the Service Tax providers and the service tax distributors but not for the manf. entrprises which are liable to pay tax.

We took the credit of service tax on the Job Work ,telephone & manpower recruitment agencies and show them in our Excise Returns.

Is it right ? And where we show credit availed on services in ST 3 ?

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2 Replies

Ajay Gumbar (Chartered Accountant) (53 Points)
Replied 01 November 2007

In this case, your firm is liable to pay service tax only on account of Feight inward / frieght outward (which is covered under GTA Service). GTA service or technically saying, "transportation of goods by road through roads carriage" is a reverse charge service. For such service Cenvat Credit can not be utilized for the payment of its liablity. Therefore, the cenvat credit which you have availed can be utilized for the payment of your excise duty liability or can be claimed as refund. But it CAN NOT be utilized for payment of service tax liability of on account of frieght. For this your firm has to pay it by cash/cheque through GAR7 form Regards, Ajay Gumbar.

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Shyam Lal Naik (Service) (6156 Points)
Replied 06 November 2007

by virtue of a recent ruling, contrary to general understanding, cenvat credit can be utilised for paymant of service tax on GTA service as well. There is no provision for refund of unutilised cenvat credit.