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INPUT SERVICE DISTRIBUTOR MEANING & SCOPE

Service Tax - By: - Dr. Sanjiv Agarwal - Dated:- 18-7-2015 Last Replied Date:- 10-2-2016 - Input Service Distributor has been defined in Rule 2(m) of Cenvat Credit Rules, 2004. The main objective of Input Service Distributor (ISD) is to receive and distribute the Cenvat Credit to the eligible offices / departments / branches / units of the service provider or manufacturer. Input Service Distributor [Rule 2(m)] Input Service Distributor is an intermediary or an office which manages the business o .....

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taxable service provider which receives bills/invoices etc., of input services. The input service distributor can distribute the eligible credit to any unit of the manufacturer or any premises/office of taxable service provider. Input service distributor is the office of the manufacturer of final products or the provider of taxable services. The residence of any employee of manufacturer or service provider or its guest house can not be called input service distributor (ISD). Any ISD can distrib .....

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cturing goods or premises providing services or other offices. (iii) It should issue invoice or bill or challan for the purpose of distributing the credit of service tax paid on the service to the manufacturing unit or service providing unit. An ISD could be any head office, registered office, corporate office, administrative office, branch office, regional/divisional/zonal office, depot, plant etc. Also, a service provider can have more than one ISD registrations. In Ecof Industries Pvt. Ltd. v .....

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ound 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. In CCE, Bangalore-I v. Ecof Industries Pvt. Ltd 2011 (4) TMI 560 - KARNATAKA HIGH COURT, where Service Tax paid by head office pertaining to advertisement of product manufactured by unit A was distributed to B . it was held that such distribution of credit was permissible under rule 7 of CENVAT Credit Rules. Rule 7 does not ma .....

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456 - CESTAT, AHMEDABAD, where assessee had availed Cenvat credit on the basis of invoices issued by head office as Input Service Distributor, it was held that legal requirement for getting Head Office registered as Input Service Distributor came into force in June, 2005 whereas assessee availed Cenvat credit on the same in March, 2005, therefore, Revenue s objection was unsustainable and credit was to be allowed to the assessee. In Sunbell Alloys Co of India Ltd v. CCE & C, Belapur 2014 (2) .....

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t distributed by another legal entity as per provisions of Rule 2(m) read with Rule 7 of Cenvat Credit Rules, 2004. In Punjab National Bank v. CCE, Meerut-I 2014 (10) TMI 29 - CESTAT NEW DELHI, since for all practical purposes, assessee was functioning as input service distributor (ISD) and availment and distribution of Cenvat was reflected in ST-3 Returns , it was held that assessee was to be treated as ISD and was eligible to take and distribute Cenvat credit by issuing invoices to branches . .....

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