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Service Tax or Central Excise Duty on Freight Charges, Central Excise

Issue Id: - 116107
Dated: 5-3-2020
By:- Krishna Murthy
Service Tax or Central Excise Duty on Freight Charges

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A manufacturing unit raises central excise invoice with basic price and central excise on the basic price. Freight is also included in the invoice but the same is not included for calculation of central excise duty. The unit has paid service tax on such freight charges levied. Now, the department says since the place of removal is buyers place, freight charges are to be included in assessable value for central excise purpose.

What is the position of law. Is payment of service tax as done by the unit is correct or the unit should have paid central excise on freight charges also, since the place of removal is buyers place or central excise duty and service tax both are applicable in this case.

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Showing Replies 1 to 4 of 4 Records

1 Dated: 5-3-2020

Both cannot be charged. Can you elaborate ? What is your sale pattern ? What is commodity and its Chapter/Heading/Sub-heading.

2 Dated: 6-3-2020
By:- CAVenkataprasad Pasupuleti

There are many decisions & circulars on this issue.

Refer SC decision in case of Ispat industries wherein the hon'ble SC held that buyers place will never be a place of removal & frieght charges are not liable for excise duty.

3 Dated: 6-3-2020

dear sir,

please read the Excise Circular No.1065/4/2018-CX dated 08-06-2018 wherein it has been clearly prescribed the place of removal.

4 Dated: 6-3-2020
By:- Krishna Murthy

Sir, Thanks for your reply. The dealer is a manufacturer of PSCC Poles used by electricity department with HSN Code 68109990. The dealer entered a PO with the electricity department for supply of the poles to the destination as mentioned in the PO. The PO specified price of poles and transportation cost and insurance separately. The PO clearly mentioned that the risk of sending the poles is of the manufacturer’s. The dealer however paid excise duty on basic price of poles and paid service tax on transportation cost and insurance.


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