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

Cenvat credit on reverse-charge freight can be distributed via input service distributor to manufacturing units for excise utilisation.
The document explains that service tax paid under reverse charge on inward freight used by manufacturing units can be taken as CENVAT credit and, subject to Rule 7 conditions, utilized for excise liability and distributed by an office registered as an Input Service Distributor; the ISD concept covers head or regional offices of manufacturers receiving invoices under rule 4A and issuing invoices/challans to allocate credit, and payment under reverse charge does not preclude distribution.