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Input service distribution

Service Tax - Started By: - K.Srinivasan Kuppuswamy - Dated:- 21-4-2017 Last Replied Date:- 25-4-2017 - Dear Tax Experts ,Please provide your valuable opinion..We are having our city office at Chennai wherein Marketing/Purchase/Commercial Finance functions being carried out for our two Factory ,duty paid godown and Export warehouse at SholinghurWe are paying Rent to city office building and distribute the service tax to our Factories under Input service distributor. We have registered under ISD. .....

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ule 7 of Cenvat Credit Rules, 2004 prescribes the procedure to distribute credit if input service which is as under: - 7. Manner of distribution of credit by input service distributor.-The input service distributor shall distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or unit providing output service or an outsourced manufacturing units, as defined in Explanation 4, subject to the following conditions, namely :- (a) the credit distr .....

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ts, during the relevant period, to the total turnover of all such units to which such input service is attributable and which are operational in the current year, during the said relevant period; (d) the credit of service tax attributable as input service to all the units shall be distributed to all the units pro rata on the basis of the turnover of such units during the relevant period to the total turnover of all the units, which are operational in the current year, during the said relevant pe .....

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ts excluding the outsourced manufacturing units. Explanation.-The provision of this clause shall, mutatis-mutandis, apply to any outsourced manufacturer commencing production of goods on or after the 1st of April, 2016; (g) provisions of rule 6 shall apply to the units manufacturing goods or provider of output service and shall not apply to the input service distributor. Explanation 1.- For the purposes of this rule, unit includes the premises of a provider of output service or the premises of a .....

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eriod shall be, - (a) if the assessee has turnover in the financial year preceding to the year during which credit is to be distributed for month or quarter, as the case maybe, the said financial year; or; (b) if the assessee does not have turn over for some or all the units in the preceding financial year, the last quarter for which details of turnover of all the units are available, previous to the month or quarter for which credit is to be distributed. Explanation 4. For the purposes of this .....

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Act. Please go through the above provisions and if you have any doubt come back with appropriate query. - Reply By K.Srinivasan Kuppuswamy - The Reply = Respected sir,My request is whether Rent of City office can be distributed to its manufacturing locations wherein production of goods and service providing activities takes placeAny specific CBEC circular regarding service tax on rent paid for city office / head office can be distributed to its manufacturing locations to avoid any audit issue.re .....

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ufacturing entities because the renting service is common for all the locations. If it is solely used for any concern, then the entire credit can be taken by the said concern.G - Reply By K.Srinivasan Kuppuswamy - The Reply = Respected ExpertsIn the city office there is no out put service activities only finance / purchase/marketing/commercial functions being carried out for manufacturing locations.Any specific CBEC circular regarding service tax on rent paid for city office / head office can be .....

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r is being completely rewritten to allow an Input Service Distributer to distribute the input service credit to an outsourced manufacturing unit also in addition to its own manufacturing units. Outsourced manufacturing unit is being defined to mean either a job-worker who is required to pay duty on the value determined under the provisions of rule 10A of the Central Excise Valuation (Determination of Price Of Excisable Goods) Rules, 2000, on the goods manufactured for the Input Service Distribut .....

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