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TaxTMI 
TaxTMI 
Manner of distribution of common input service credit under rule 7(d) of the Cenvat Credit Rules, 2004 - regarding.
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....missioners of Central Excise and Service Tax (All), Director General (Service Tax), Director General (Audit), Director General (Central Excise Intelligence), Commissioners of Service Tax (All), Commissioners of Central Excise and Service Tax (All). Madam/Sir, Subject: Manner of distribution of common input service credit under rule 7(d) of the Cenvat Credit Rules, 2004 -- regarding. Doubts ....
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....of such units during the relevant period to the total turnover of all its units, which are operational in the current year, during the said relevant period' 2. These doubts have arisen with respect to the meaning of the words 'such unit' used in rule 7(d). It has been stated in the representations that due to the use of the term 'such unit', the distribution of the credit would be restricted to o....
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....nover of the previous year. To make the intent of the amended rule clear, illustration of the method of distribution to be followed is given below. 4. An Input Service Distributor (ISD) has a total of 4 units namely 'A', "B', 'C' and 'D', which are operational in the current year. The credit of input service pertaining to more than one unit shall be distributed as follows: Distribution to 'A' = ....
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.... common input service relates to units 'A', 'B' and 'C', the distribution will be as under: (i) Distribution to 'A' =12000 * 2500000/10000000 = 3000 (ii) Distribution to 'B' =12000 * 3000000/10000000 = 3600 (iii) Distribution to 'C' = 12000 * 1500000/10000000 = 1800 (iv) Distribution to 'D' = 12000 * 3000000/10000000 = 3600 The distribution for the purpose of rule 7(d), will be done i....