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TMI BlogREVERSAL OF SERVICE TAX PAID ON RCM BASISX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir Our Company provide Freight Forwarding Transportation Service to the Various Customers 1. Company hire transporter form the market and paid Freight Charges to the Transporter and Paid the Service Tax - Reverse Charges Basis as per Service Tax law. 2. After deposit the service tax on above said GTA Services we will take the Credit on above said deposit tax on other services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. We are making separate invoice to recover the Freight charges - without collecting of Services because service tax paid by Customer as per RCM Basis). Now Department Audit party want to Reversal of all such input tax credit taken by us ( e.i. All service tax paid on GTA Freight Charges paid by us ). They are saying that this is not cover in output services. Kindly Advise us Asap. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Reply By KASTURI SETHI - The Reply = Dear Querist, You are neither consignor nor consignee. Are you not playing the role of 'intermediary' ? Pl. confirm. - Reply By YAGAY and SUN - The Reply = In our view since you are not providing any output services, therefore, availment of CENVAT Credit is doubtful. - Reply By KASTURI SETHI - The Reply = Yes.Sir. I am al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so of the same view. The Department is right. - Reply By MOHAN PANDEY - The Reply = Dear sir. we are taken seperate contract regarding goods movement i.e air rail. sea and road . in case of road transport fright paid by us directly to transport er and we are issue the invoice as per contract price. in that case we are adding our margin also and same bills tax paid by our customers as per revers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e charge basis. this practice is following almost logistics industry - Reply By MOHAN PANDEY - The Reply = we are providing other service like custom clearance . port service. cargo . and above said input tax credit used in other services . the said credit paid by us on gta service inward. - Reply By MOHAN PANDEY - The Reply = COMMISSIONER OF SERVICE TAX, RAIGAD VERSUS DUJODWALA PRODUCTS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD 2014 (10) TMI 31 - CESTAT MUMBAI Cenvat credit - Goods Transport Agency Services - Reverse Charge mechanism - Held that:- even though the person is not providing service but is paying service tax as per law on reverse charge basis, by the fiction of law the service on which he is discharging service tax shall be deemed to be 'output service'. In the present case also the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, since they discharged the service tax on GTA service, the said GTA service became an 'output service'. - Rule 3(4) of the Cenvat Credit Rules, 2004 provides the manner of utilisation of the cenvat credit availed by an assessee - From the above provision for utilisation of Cenvat credit, it provides, amongst others, the Cenvat credit can be utilised for payment of service tax on outp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut service. As discussed in above para the GTA service though received by the respondent but paid service tax thereoupon, the said GTA service is an 'output service'. Therefore the utilisation of Cenvat credit for payment of service tax on GTA made by the respondent is legal and correct - following the Hon'ble Punjab Haryana High Court judgment in Nahar Industrial case [2010 (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 608 - PUNJAB AND HARYANA HIGH COURT] held that prior to 01.03.2008 the payment of service tax on GTA by utilising Cenvat credit is legal - Decided against Revenue. Dear Sir Kindly advise us same question is arise by the audit party . we can take this case law - Reply By YAGAY and SUN - The Reply = This deeming fiction was changed in recent past, may be in 2012 or 2103 budget. - Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly By MOHAN PANDEY - The Reply = Dear Experts Kindly advise us as per CENVAT Credit Rules and any changes in rule acts in the year (2015-16 to June 2017), we have read many of the such court case in this particulars argument (GTA Inward - Tax paid consider as a input tax credit) of the department decided against the revenue. Rule 7[(7) The CENVAT credit in respect of input service sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be allowed, on or after the day on which the invoice, bill or, as the case may be, challan referred to in rule 9 is received: 17[Provided that in respect of input service where whole or part of the service tax is liable to be paid by the recipient of service, credit of service tax payable by the service recipient shall be allowed after such service tax is paid: Kindly advise us. - R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply By DR.MARIAPPAN GOVINDARAJAN - The Reply = In my view you may rely on the case law cited by you. - REVERSAL OF SERVICE TAX PAID ON RCM BASIS - Query Started By: - MOHAN PANDEY Dated:- 22-6-2018 Service Tax - Got 9 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagemen ..... 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