Cenvat credit for Goods Transport Agency (GTA) service used for ...

Sale completed on delivery to buyer's factory. Outward freight charges for FOR sale eligible for CENVAT credit.

Case Laws     Central Excise

July 10, 2024

Cenvat credit for Goods Transport Agency (GTA) service used for transportation of finished goods is recoverable, treating it as rightly availed credit. Transportation charges are to be added to the value only until the transfer of ownership of goods, as expenditure incurred after ownership transfer is on buyer's account and cannot be included in valuation of goods manufactured by buyer. Sale is effected when ownership transfers from seller to buyer, determined based on provisions of Sale of Goods Act, 1930 and facts of each case. As per Section 4 of Central Excise Act, 1944, for valuation of excisable goods for ad valorem duty, transaction value shall be considered where goods are sold for delivery at time and place of removal, assessee and buyer are unrelated, and price is sole consideration. Here, sale occurred when goods were delivered at customer's factory works as per purchase order. Cenvat credit on outward freight charges allowed.

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