Input Service Distribution (ISD)

[Ganeshan Kalyani]

I would like bring some points in front to get clarified as regards Input Service Distribution is concerned. There are various services availed at Head Office. Some are specific to a particular unit, whereas some services are common for some units. Also there are services which are availed for Head Office. Most of us have a doubt in our mind as regard which service tax credits should be considered to distribute to units where excise duty is payable. As I understand the service which is specific to a particular unit should be distributed 100% to that unit only. Whereas services which are common in nature say for eg. legal consultancy for legal, service tax or excise matter in department or Tribunals, where the consultants are providing service for different locations and raises one common bill in the Head office address. The service tax should be distributed in the turnover ration of those units for which the service is availed. Thirdly while distributing the service tax on service which is specific to Head office eg. audit fees, security service etc. whether such service tax credits can also be distributed to units where excise duty is payable and in which ratio.

kindly through some lights in ISD method.

regards,

ganeshan

AI Summary

Clarification Sought on Input Service Distribution of Tax Credits Under Cenvat Credit Rules, 2004; Further Discussion Invited. A participant raised concerns about Input Service Distribution (ISD) related to service tax credits at a Head Office, questioning how to allocate credits for services specific to certain units, common services, and those specific to the Head Office. A respondent referred to a recent circular clarifying the distribution of common input service credit under the Cenvat Credit Rules, 2004. The original participant sought further discussion on the types of services eligible for Cenvat credit distribution. Another respondent explained that ISD allows distribution of service tax on all input services as per the rules and offered further consultation for a fee.