service tax 1.5%on Import material value(IGST ON OCEAN FREIGHT) AND Service tax credit on outwards transportation.
Query (Issue) Started By: – BHAKTIKANT BHATT Dated:- 17-2-2018 Last Reply Date:- 20-5-2018 Service Tax
Got 5 Replies
Service Tax
SIR,
\nwe are a packaging material manufacture unit.We have import our Raw Material (Plastic Granual) Now Excise EA-2000 Auditor raise a question on import Raw Material and ask us to Pay Service Tax 1.5%on Import Material CIF Value From April-2017 to June-2017 IGST ON OCEAN FREIGHT IN RESPECT OF IMPORT MATERIAL. AS PER CIRCULAR NO.206\/4\/2017- Service Tax Dt.13\/4\/2017.
\nKindly give us your valuable suggestion with cited any case whether we need to PAY 1.5% Service tax on import material value and after it allowable to take credit then in GST Rule How can we take credit ?
\n2. query.
\nWe have paid service tax on our outwards transportation of goods from our factory to customer premises.Also we have paid Excise duty on transportation char<\/p>\n
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\nService Tax (Pre-2017) 10.5.2013-21.1.2017
\n * Services by way of transportation of goods by an aircraft or a vessel from a place outside India to the Customs station of clearance in India as specified in the negative list which thereby, exempted service from Service Tax U\/s 66 D(p)(ii).
\n * The said entry under the Negative list as omitted with effect from 1.6.2016 and a provision was incorporated in the Mega Exemption Notification No.25\/2012-ST, dtd 20.6.2012 vide Entry 53 continuing the exemption.
\nService Tax (Post-2017) 22.1.2017 – 01.07.2017
\n * The Mega Exemption Notification was amended vide Notification No. 1\/2017-ST, dtd. 12.1.2017 and a proviso was inserted excluding from the ambit of the exemption services by way of transportation of goods by a vessel from a place outside India upto the Customs station of clearance in India received by a person located in a non-taxable territory.
\n * Further Notification No. 2\/2017-ST & 3\/2017-ST dtd. 12.1.2017 were introduced and th<\/p>\n
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\n * This is a double taxation issue where IGST is leviable on the CIF value of the goods and also separately on the Freight amount. Input Tax Credit is available on the IGST paid under RCM.
\n * Refer a recent case where the clarification from the Revenue is awaited for further proceedings against a the said issue.
\n2018 (2) TMI 770 – GUJARAT HIGH COURT
\nMohit Minerals Pvt Ltd Versus Union of India Dated:- 9-2-2018
\nIn: GST
\nSpecial Civil Application No. 726 of 2018
\nLevy GST on ocean freight whereas the value of import goods includes Ocean Freight. – Vires of N\/N. 8\/2017-Integrated Tax [Rate] dated 28th June 2017 and Entry 10 of the N\/N. 10\/2017-Integrated Ta<\/p>\n
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\n“(C) “place of removal” means –
\n * a factory or any other place or premises of production or manufacture of the excisable goods ;
\n * a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty;
\n * a depot, premises of consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;
\nIt is clear from the above definition of place of removal can be factory or any other place or depot<\/p>\n
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\n * the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step;
\n * the seller bore the risk of loss of or damage to the goods during transit to the destination; and
\n * the freight charges were an integral part of the price of goods.
\nIn such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place.
\nTrust the above explanation helps!
\nReply By RamKumar Lakkoju:
\nTh<\/p>\n
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