Who is input service distributor service tax

Also, a service provider can have more than one ISD registrations. In Ecof Industries Pvt. Where assessee distribute credit of service tax in respect of its one unit even though service tax had been paid in respect of services used by its another unit and lower appellate authority denied distribute of service tax credit on the ground that service tax credit relating to one unit should not be distribute to other unit, it was held that restricting distribution of service tax credit cannot be upheld.

Ecof Industries Pvt. Rule 7 does not mandate that the assessee is entitled to take credit only in unit where the product is manufactured. In ITC Ltd. Therefore, they were not entitled to availment of Cenvat credit distributed by another legal entity as per provisions of Rule 2 m read with Rule 7 of Cenvat Credit Rules, In Punjab National Bank v.

By: Dr. Sanjiv Agarwal - July 18, This is in a scenario where there are lots of input service credit availed in HO. HO mainly renders export of services. This HO has manufacturing units in other places. Can you further support your response with any case law,circular etc.

Rule 7 of Cenvat Credit Rules, provides for the mechanism of distribution of common input service credit by the Input Service Distributor to its manufacturing units or to units providing output services.

The credit of a service used exclusively in one unit can be distributed only to that unit. If it is used in more than one unit, the credit can be distributed proportionate to the turnover of the units.

Further the credit of service tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services cannot be distributed. It is important to note that there is no requirement to distribute the credit proportionately. The Input Service Distributor can distribute to various units as the circumstances warrants.

There is no rule regarding periodicity of distribution. The Invoice shall be serially numbered and contain the following particulars;. If the Input distributor is a banking company or a financial institution, the invoice need not be serially numbered. The records maintained by the Input service distributor must contain the following:.

Your email address will not be published. GST Act provides that the following shall be deemed to be an inappropriate distribution of tax credit by Input Service Distributor:.

Yes, the ISD registration is for one office of the taxpayer which will be different from the normal registration. The revenue-generating units have GST liability, so rightly the ITC on those services used by them must be allocated to them to use the tax credit to set off against their tax liability. Different offices of a taxpayer can apply for ISD registration. Yes, different offices like the marketing division, security division etc.

The credit distributed in contravention of provisions of Act could be recovered from the recipient to which it is distributed along with interest. No, the ISDs need to file only a return in Form GSTR- 6 and the return has the details of credit received by them from the service provider and the credit distributed by them to the recipient units. Since their return itself covers these aspects, there is no requirement to file a separate statement of inward and outward supplies.

For a better understanding of the procedure prescribed for ISD, read our articles:. Thank you for your response. The 1 GST billing solution for your business Create, edit, share invoices on- the-go Also available on web.

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