INPUT SERVICE DISTRIBUTION CREDIT OF PREVIOUS YEAR (2013-2014)

[Guest]

Can we distribute Service tax credit of F.Y. 2013-2014 of Renting of Immovable property to other units now i.e in June 2014, If yes then which F.year turnover is to be taken for pro rata calculation of credit. Please explain.

[YAGAY and SUN]

Dear Sandesh,

Please check meticulously Rule 7 of the CENVAT credit Rules, 2004 read with Explanation 1, 2 and 3 in this regard.  This Rule is self explanatory.

Regards

Team YAGAY & SUN

(Management & Indirect Tax Consultants)

[Ganeshan Kalyani]

In case of ISD if the service is availed for Ho, can that be distributed to units where it can be utilized against excise liability.

AI Summary

CENVAT credit distribution: input service credit for renting immovable property may be apportioned using applicable turnover period. Distribution of input service credit for renting of immovable property must be apportioned pro rata under the Cenvat credit framework, applying the turnover-based allocation rule and the explanatory provisions when performing retrospective distribution. Where services are availed at a head office, ISD mechanisms allow allocation to units eligible to utilize the credit against excise liability, subject to the Cenvat credit rules and procedural conditions.