Cenvat credit is allowed as per the Cenvat Credit Rules, 2004:

By GTA where the service tax is payable by GTA, the benefit of availment of Cenvat credit relating to input services can be taken only when abatement at 75 per cent is not taken under Notification No. 01/2006-ST dated March 1, 2006.

By consignor or consignee: One of the conditions to be satisfied by consignor or consignee availing GTA services is that the transport of goods on which service tax has been paid qualifies to be an output service. Rule 2(p) of Cenvat C redit Rules, 2004 defines output service as any taxable service provided by the service provider. As per the explanation to Rule 2(p), if a person liable for paying service tax did not provide any taxable service or did not manufacture final goods, the services for which he was liable to pay service tax would be deemed to be output service. As such, all such persons were allowed to use Cenvat credit earned while discharging liability to pay service tax in GTA services. The said explanation has since been omitted vide Notification No. 08/2006-CE (NT) dated April 19, 2006, meaning thereby that all such consignors or consignees will have to discharge service tax liability on GTA services by paying service tax through TR-6 challan in cash only.

Any service tax borne on any input service is eligible to be taken as Cenvat credit (paid by receiver or provider, as Cenvat rules do not differentiate between the two) and can be adjusted against liability for service tax or excise duty. The CBEC has also clarified that abatement shall also be allowed to consignor or consignee in cases where they have discharged the liability as a receiver of service. Where consignor or consignee is neither a manufacturer of goods or provider of output taxable services, Cenvat credit cannot be availed or earned.

Where an ambulance is hired from hospital against a charge, will it be a taxable service?

Veera Raghavan