Department deny for R&D distribute service Tax credit. Challan issued by R&D, as the R&D centre cannot be treated as an office to distribute input service credit.

[Rajan Rajan]

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Dept. deny for R&D distribute Service tax credit. Issue is challan issued by R&D, as the R&D cannot be treated as on office to distribute input service tax credit.

Is it sustainable under ST rule, can we challenge this. please provide  case laws/inputs

AI Summary

Cenvat credit distribution limited where R&D lacks nexus to manufacturing; eligibility hinges on nexus and location of R&D assets.
Whether R&D can be treated as an office to distribute input service credit turns on nexus with manufacturing or output services; R&D that improves or upgrades goods or services may qualify to distribute credit. Conversely, CENVAT rules exclude credit for capital goods/inputs used for R&D not falling under specified headings and for R&D units located outside the manufacturer's factory, supporting denial of credit where nexus or location requirements are unmet.