Dear Tax Experts ,
Please provide your valuable opinion..
We are having our city office at Chennai wherein Marketing/Purchase/Commercial Finance functions being carried out for our two Factory ,duty paid godown and Export warehouse at Sholinghur
We are paying Rent to city office building and distribute the service tax to our Factories under Input service distributor. We have registered under ISD.
Please confirm whether it is correct and we are eligible for service tax credit.
Regards
K Srinivasan
Company Can Distribute Service Tax Credit for Office Rent Proportionally by Turnover, per Rule 7 of Cenvat Credit Rules. A company with a city office in Chennai, handling marketing, purchase, and finance for its factories, seeks advice on distributing service tax credit for rent paid on the city office. Experts advise that the credit can be distributed proportionally based on turnover across the company's locations, as per Rule 7 of the Cenvat Credit Rules, 2004. The credit cannot be entirely allocated to manufacturing units unless the service is exclusively used by them. Additional clarifications from CBEC circulars were sought to ensure compliance and avoid audit issues. (AI Summary)
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