CESTAT Grants CENVAT Credit on GTA Services for FOR Basis Sales, Relying on Board Circular [Read Order]

The Ahmedabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) granted CENVAT credit on Goods Transport Agency (GTA) services for sales made on Free on Road (FOR) basis, relying on the Board Circular No. 1065/4/2018-CX dated June 8, 2018.

Gmm Pfaudler Ltd.,appellant-assessee,through its counsel and stated that the present case involved a periodical Show Cause Notice for April 2015 to September 2015. It was highlighted that in their own case for an earlier period, the matter had been decided in their favor through Final Order No. A/10872-10873/2019 dated 10.05.2019, while an adverse decision was issued through Final Order No. A/11425/2019 dated 22.07.2019.

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The Authorised Representative defended the order, citing the Supreme Court's decision in CCE & ST vs Ultratech Cement Ltd., 2018, which held that Cenvat Credit was not allowed for GTA services on goods transported from the place of removal to the buyer’s premises before the 2008 amendment.

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In response, the assessee’s counsel referred to the M/s Salasar Copper vs Commissioner of Central Excise & Service Tax, Daman case, 2019, which considered the Board’s Circular No. 1065/4/2018-CE dated 08.06.2018 and the Ultratech Cement decision, ruling in favor of the assessee.

Read More: CENVAT Credit should be allowed in respect of GTA Services used for Outward Transportation: CESTAT

A single member bench comprising Somesh Arora (Judicial Member) considered the submissions and found merit in the decisions cited by the assessee’s counsel. It referred to the Salasar Copper case, which allowed Cenvat credit on GTA services for FOR basis sales, along with similar rulings in the Sanghi Industries Ltd. and Ultratech Cement Ltd. cases.

The appellate tribunal also noted Board Circular No. 1065/4/2018-CX dated 08.06.2018, which confirmed the benefit of Cenvat credit for FOR basis sales.

Based on these precedents and the assessee’s earlier case, the CESTAT ruled that the matter was no longer res-integra. It allowed the appeal and set aside the impugned order.

To Read the full text of the Order CLICK HERE

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