Input Service Distributor

[Asked by Guest]

Dear sir,

What is Input Service Distributor

How to distribute to our division and adjusted with our service tax liabilities.

[Ganeshan Kalyani]

Sir, Input Service Distributor is an office of manufacturer where common services are availed. The services so availed is distribution to all the manufacturing units liable for payment of excise duty. The credit is distributed on turnover ratio. Thanks.

[KASTURI SETHI]

Sh.Umesh Kumar Ji,

I fully endorse the views of Sh.Ganeshan Kalyani, Sir.

[KASTURI SETHI]

Pl. also go through Rule 7 (b) (c)(d)(e)(f) of Cenvat Credit Rules, 2004. These are very important.

[Ganeshan Kalyani]

Yes sir the rules are essential as they provides the manner in which the credit should be distributed. Thanks.

[Suryanarayana Sathineni]

Dear Friends,

An ISFD can also distribute the unit specific credit to the relevant unit in addition to the common credit in terms of Rule 7 of CCR,2004 and the formulae prescribed therein for common credit distribution.

Best Regards

Suryanarayana

AI Summary

Input Service Distributor enables allocation of input service credit among constituent units for adjustment of service tax liabilities.
An Input Service Distributor is an office that allocates Cenvat/service tax credit for common input services among constituent manufacturing or taxable units, typically by a turnover-based allocation. The Cenvat Credit Rules prescribe the procedural framework and formulas for apportioning common credit. An ISD may also transfer unit-specific input service credit directly to the relevant unit, subject to the rules and record-keeping required for adjustment of service tax liabilities.