Input credit Distribution by Service receiver(Service tax Paid under reverse charge) to Mfg Units

[A Wilson]

Dear Experts,

We are a Trading Company having Centralized Service tax Registration at One Place for various premises located across the Country and paying service tax on Freight Payment under GTA. And We have two manufacturing units which are also included in the service tax centralized registration.

I wanted to clarify

1. Whether we are eligible to take credit of service tax on freight(inward freight pertaining to Mfg Units) paid under reverse charge?
2. If the service tax credit is eligible for Utilization for Payment of excise duty liability for the Mfg Units,
   1. then can we opt for Input service distributor to distribute the credit {of service tax on freight paid under RCM} to the Mfg Units under distribution Invoice or challan?​

Please give your Inputs on the above.

Thanks and Regards,

A.Wilson

AI Summary

Trading Company Can Use Service Tax Credit on Inward Freight to Pay Excise Duty, Rule 7 Cenvat Credit Rules A trading company with centralized service tax registration inquired about eligibility to claim service tax credit on inward freight paid under reverse charge for its manufacturing units. They sought clarification on using this credit to pay excise duty and whether they could distribute the credit via Input Service Distributor (ISD) invoices. Experts responded affirming the possibility, citing Rule 7 of the Cenvat Credit Rules, 2004, which allows distribution of service tax credit by ISD, including credit paid under reverse charge. The discussion emphasized that service receivers can distribute credit if registered as ISD.