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Cenvat Credit on Outward Goods Transportation
Denied! – Supreme Court Judgement Will Hurt Many Assesses

By CA Ankit Gulgulia (Jain)
Supreme Court set aside all High Courts and Tribunals orders to decide
that Outward GTA shall not be allowed as Input services making all such
cenvat claims by assessee as

The Judgement
in case of Commissioner of Central
Excise Service Tax Versus Ultra Tech Cement Ltd. 2018 (2) TMI 117 – SUPREME COURT OF
has held that
Cenvat credit availed during the period January 2010 to June 2010, on
outward GTA service used by the assessee for transportation of their goods
from factory gate to the customer’s premises in case of domestic sale, is

Supreme Court
also held that Board Circular No. 97/8/2007 dated 23.08.2007 which took into account, the definition of ‘place of
removal’ as under Section 4(3)(c) of the
Central Excise Act, 1944 cannot be relied upon in the favour of assessee
in light of amendments which makes the circular inapplicable in the current
Importantly, SC observed that since the definition of Input services
allowed .
Used by the manufacturer, whether
directly or indirectly, in or in relation to the manufacture of final products
and clearance of final products
upto the place of removal ,
the benefit which was admissible (earlier before 2008 amendments) even
beyond the place of removal now gets terminated at the place of removal and
doors to the cenvat credit of input tax paid gets closed at that place.

Impact of this Judgement on Current Cases

shall be able to pursue all the disallowance and applicable interest/penalty for
such credit of Outward GTA taken. In my view, invoking extended period of
limitation would be both harsh and may again face litigation. Nonetheless,
matter will take its due course.

Whether it will be Dealt under GST or Central Excise Cenvat

Further note
as per Sect
ion 142(6)(b) of CGST Act, 2017

proceeding of appeal, review or reference relating to recovery of CENVAT credit
initiated whether before, on or after the 1st July, 2017 shall be disposed of
in accordance with the provisions of Earlier law and if any amount of credit
becomes recoverable as a result of such appeal, review or reference, the same
shall, unless recovered under the existing law, be recovered as an arrear of
tax under this Act and the amount so recovered shall not be admissible as input
tax credit under this GST Act.”

Hence the
amount of such cenvat will be completely dealt as per Excise / Cenvat
Provisions only. Comments and Feedbacks in Box Below.

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