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SERVICE TAX INPUT IN SALES RETURN CASES??

A learner (Corporate Accounts ) (345 Points)

14 January 2010

Hi ALL

Please guide me on following.. Service tax on freight paid by me... for the purpose of bringing my sales return back to my godown(place of removal) is elegible for cenvat input or not? please give sourse of info. also if any notification is there on it.

With a lot of thanks in advance

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2 Replies

Amir (Learner) (4016 Points)
Replied 14 January 2010

Dear Sunny,

As we disscussed on PM's ,that as per Rule 16, this bought back of Finished goods gives them the status of "INPUTS" & hence Credit of services on Inputs can be taken

RULE 16. Credit of duty on goods brought to the factory. — (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.

(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.

[Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.]

(3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner.