Service Tax on Trading of Goods

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..... Service Tax on Trading of Goods
Query (Issue) Started By: - deepak kalambate Dated:- 23-12-2015 Last Reply Date:- 26-12-2015 Service Tax
Got 5 Replies
Service Tax
Dear Sir, We are manufacturer Exporter. Our major Input is Cotton Yarn. We are procuring Yarn from local market at NIL rate of CEx Duty (being most of the yarn manufacturers and working under Notfn. 30/2004 CE) as well as .....

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..... importing from various countries on payment of Customs Duty and also availing CENVAT of CVD/SED. We have Exported some quantity of Yarn (our Input) and it is shown as "Traded Goods" in our Financial Reports. Now C.Ex. department is demanding 6% Reversal of Service Tax Credit as per Rule 6(3) of CCR 2004 being trading activityis now EXEMPTED SERVICE even though the GOODS are Exported un .....

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..... der Bond (Para 3.4 of Chapter 5 of CBEC Manual-Supplementary Instructions) Please advice. Reply By KASTURI SETHI: The Reply: Pl. go through Rule 6 (6) (v) of Cenvat Credit Rules, 2004. Value of exported goods not to be taken into account though trading goods. Rule is very much clear. Reply By YAGAY AND SUN: The Reply: No need to reverse the CENVAT credit as there is no duty/taxes on exports. .....

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..... Further, Rule 6 6 (v) of the CENVAT credit Rules should be brought to the kind knowledge of the Department. Reply By deepak kalambate: The Reply: Service Tax Rule 6A (1) (c) Export of Services is applicable for this? Reply By YAGAY AND SUN: The Reply: Not applicable, Since you are exporting goods on which such services were used in manufacturing of finished goods. Reply By CS SANJAY MALHOTRA: .....

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..... The Reply: Dear Deepak, Please note that Central Excise officers can demand Service Tax @6% only if your are dealing in Excisable and Exempted goods from same place of business. Also note that if you have availed CENVAT Credit on common Input Services used for manufacture & Trading of goods such as Telephone Bills, Statutory Audit fees, etc and have further availed the benefit of Duty Drawbac .....

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..... k on manufactured goods, then the Demand raised by Excise officers on Trading part is correct.
Discussion Forum - Knowledge Sharing .....

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