Assessee Can't Claim ITC For Transportation If Costs Aren't Included In Assessable Value Of Goods For Payment Of Central Excise Duty: Kerala HC

The Kerala High Court ruled that an assessee cannot claim input tax credit (ITC) for transportation services if transportation costs are not included in the assessable value of goods for the payment of central excise duty. The case involved an assessee engaged in the manufacture and sale of electrical transformers, who excluded freight and insurance charges from the assessable value. The court referred to a Supreme Court case and held that the place of removal for excise duty purposes is the buyer’s premises if the contract is on a Free on Road (FOR) basis. Since the assessee did not include transportation costs in the assessable value, they were not entitled to ITC for transportation services. This decision underscores the importance of including transportation costs in the assessable value for claiming ITC.