ISD can distribute ITC to SEZ or not.

[Alkesh Jani]

Dear Experts,

If a company is having his head office in Delhi and three factory in three different states and one unit in SEZ. The head office had taken registration as ISD also.

The query is :-

ISD can distribute ITC to its SEZ unit or not.

Thanks

[KASTURI SETHI]

ISD can distribute ITC ( credit of input service only) to SEZ.

[Alkesh Jani]

Sir,

Thanks for your reply.

Sir one more query, what if one of the unit is EOU unit. Can ISD distribute to its EOU?

With regards,

[KASTURI SETHI]

No such restriction. Emphasis is on service distribution in relation to the turnover of the preceding financial year.

[Yash Jain]

Dear Sir,

In Offline Utility of ISD 6, the Option for SEZ is also there and hence we can take ISD Credit for SEZ.

Also it will be visible in GSTR 2 for SEZ, please check.

Regards

[Ganeshan Kalyani]

I am also of the view that ISD can distribute credit to Sez and iou as well.

AI Summary

Input Service Distributor allocation to SEZ and EOU allowed, governed by proportional distribution based on prior turnover. An Input Service Distributor (ISD) holding registration may distribute credit of input services to a Special Economic Zone (SEZ) unit. Distribution is governed by ISD rules, principally allocation in relation to the recipients' turnover in the preceding financial year. There is no stated bar on distribution to an Export Oriented Unit (EOU)/IOU, and the ISD utility includes SEZ options with such distributions reflected in recipient returns.