2 units separate ser tax registration

[venkat eswaran]

Dear all,

we are having 2 mfg units. For the main unit we have registered with ser tax for paying GTA and manpower supply ser tax and taking credit.

For the 2nd unit we do not have ser tax registration. now there also some GTA and manpower supply bills are coming, Whether we have to register separately with ser tax dept ST-1 for unit-2? or we can make amendment with existing [unit-1] registration? What is ISD and its purpose and use?

Pl share ur views. Thanks in advance

Venkat

[Suryanarayana Sathineni]

Dear Friend,

Since you have already taken ST registration for Unit-1, better take Registration for Unit-2 also and take credit.

In the alternative, You please cancel the ST Registration of unit-1 and take a centralized registration on your office address where the centralized Accounting system of receipts and payments are handled and also take ISD Registration so that you can take entire clredit ( as per eligibility) in ISD and distribute the said credit (unit specifi and common based on formulae) to both your Mfg. Units.

For more clarity on ISD ( Input Service Distributor) , pl. refer Rule 7 of Cenvat credit Rules,2004.

Best Regards

Suryanarayana

[Ganeshan Kalyani]

Sir, Input Service Distributor is an office of manufacturer, producer of goods or premises of provider of service. ISD receives invoices for the services availed at Head office for HO or for factory. These services are distributable on the proportionate basis under ISD.

In my view you cannot take credit of unit 2 unless you have registration. So it is advisable to get service tax registration for unit 2 separately which will help you to avail th re service tax credit of unit 2.

Thanks.

[KASTURI SETHI]

Sh.Venkat Eswaran Ji,

I subscribe to the views of both experts. Further, I add that it is assessee's option whether to apply for centralised registration or get both the units registered separately for the purpose of payment of Service Tax and performing other formalities and also for other benefits under Cenvat Credit Scheme. Attention is drawn to Rule 4(3) & (3A) of Service Tax Rules, 1944. In case he has not centralised billing or accounting system, he cannot apply for centralised registration. In that situation, registration as ISD is requirement of law. However, if the assessee opts for Centralised Registration certificate, he need not apply for registration as ISD. Centralisation registration would cover all the aspects.

AI Summary

Business Considers Separate or Centralized Service Tax Registration; Rule 7 of Cenvat Credit Rules 2004 Discussed A business with two manufacturing units, one registered for service tax (ST) to pay for Goods Transport Agency (GTA) and manpower supply, seeks advice on whether to register the second unit separately or amend the existing registration. Responses suggest obtaining separate ST registration for the second unit to avail service tax credits. Alternatively, a centralized registration covering both units could be considered, especially if there is a centralized accounting system. Input Service Distributor (ISD) registration might be necessary to distribute credits if centralized registration is not feasible. Legal references include Rule 7 of Cenvat Credit Rules, 2004, and Rule 4(3) & (3A) of Service Tax Rules, 1944.