The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled that the credit of GTA service can be allowed from the place of removal to to the place of removal.
The Appellant, M/s Shalimar Paints Ltd has three manufacturing units at Nasik, Sikandrabad and Howrah and the Head Office at Kolkata. The Appellant was receiving services of Goods Transport Agency (GTA) at the head office for the removal of goods from respective factories to its various depots. The Head Office was registered with the Service Tax Department and they were distributing the credit to their units, where the ISD registration was granted later on in 2016.
It was settled law that the GTA credit could be availed only up to the place of removal and not from the place of removal, the Head Office could not distribute credit without having ISD registration, and the credit was to be proportionately distributed to all the units.
The assessee contended that the period involved was before 1.4.2008 when the definition of input service was amended by restricting the credit on GTA services from the place of removal to to the place of removal.
It was observed that Rule 7 of CCR provided the mechanism to distribute the credit and the condition for proportionate distribution was insertedafter the amendment made in 2016. Further observed that the impugned order denying credit based onnon-registration of Head Office as ISD was not sustainable.
Shri P K Choudhary, JM and Shri P Anjani Kumar, AM observed the impugned orders are not sustainable on merits and limitations as well. The appeals are allowed with consequential relief to the Appellants bythe law.
Shri Rajesh Chhibber appeared for the Appellant and Shri J Chattopadhyay & A Roy appeared for the Respondent.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
