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Input service distributor !

CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)

15 March 2010

What is "input service distributor"? I read about it while studying service tax. But dont what it is.

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11 Replies

EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 15 March 2010

PLEASE GO THROUH THE FOLLOWING LINK

https://www.servicetax.gov.in/circular/st-circular07/st_circ_97-2k7.htm

HOPE YOU WILL UNDERSTAND YOUR REQUIREMENT IN DETAIL.

CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)
Replied 15 March 2010

Thanks for your concern. That definition was also in my book. Its like

" An ‘input service distributor’ is an office or establishment of a manufacturer of excisable goods or provider of taxable service. It receives tax paid invoices/bills of input services procured (on which CENVAT credits can be taken) and distributes such credits to its units providing taxable services or manufacturing excisable goods. The distribution of credit is subject to the conditions that,- (a) the credit distributed against an eligible document shall not exceed the amount of service tax paid thereon, and (b) credit of service tax attributable to services used in a unit either exclusively manufacturing exempted goods or exclusively providing exempted services shall not be distributed. An input service distributor is required (under section 69 of the Act, read with notification no.26/2005-ST) to take a separate registration."

But I want it in simple words, with some examples. thanks.

EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 16 March 2010

Mr Abisekh please try this link for more detail.

https://www.saralaccounts.com/resources/st-serviceprovider.php

IF NOT SATISFYED PLEASE TYPE THE WORD "Input service distributor" IN GOOGLE SERCH (Pages from India). you will find the detail in one or other pages. I can narrate you but it will consume lot of time. If you have any problem write me in my mail.

Amir (Learner) (4016 Points)
Replied 19 March 2010

Dear Abhi,

IN SERVICE TAX WE HAVE TWO TYPES OF REGISTRATION - ONE IS CENTRALIZED AND OTHER IS DECENTRALIZED

So in case of Decentralized Registration this concept of ICD has relevance.

Best example of ISD is Head Office and Branch Offices. say HO, B1 & B2.

Cenvat Credit is taken on the basis of cenvatable invoices/documents, suppose invoice of input services are received by HO and payment is also made by HO, but the output services are provided only by B1 & B2 so in this case HO will obtain the registration as ICD & can distribute the credit between its branch offices, which otherwise would not have been piossible in the absences of ICD.

If stil not clear then plz ask..........

5 Like

Pragnesh (AM - Taxation) (1259 Points)
Replied 19 March 2010

An ‘input service distributor’ is an office or establishment of a manufacturer of excisable goods or provider of taxable service. It receives tax paid invoices/bills of input services procured (on which CENVAT credits can be taken) and distributes such credits to its units providing taxable services or manufacturing excisable goods. The distribution of credit is subject to the conditions that,- (a) the credit distributed against an eligible document shall not exceed the amount of service tax paid thereon, and (b) credit of service tax attributable to services used in a unit either exclusively manufacturing exempted goods or exclusively providing exempted services shall not be distributed.

2 Like

krishna kanth (Manager & Final Student) (35 Points)
Replied 19 March 2010

amir sir nice explaination

CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)
Replied 02 April 2010

Ok. thanks Amir and Pragnesh.

1 Like

CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)
Replied 02 April 2010

Ok. thanks Amir and Pragnesh.

R.Sankaranarayanan (Indirect Tax Executive) (163 Points)
Replied 24 September 2010

Input Service Distributor

Necessity for Input Service distributor:-

In many cases (like the cases of manufacturers having different units spread over vari-ous parts of the country), it may happen that the bill/ invoice in respect of input servic-es is raised in the name of head office/regional office, etc., while the services are actual-ly received in the factory / factories or premises of the service provider. Similarly, in the case of services which are not specific for any particular factory or premises (such as advertising, market research, management consultancy, etc.) the bills/invoices may be received in the aforesaid head office/ regional offices etc. In order to provide for a me-chanism whereby the tax credit could be passed on the respective factory/ premises, such head office/ regional offices will have to take up the responsibility of distributing the tax credit to these units through the medium of invoices. Such offices of the manu-facturer or service provider are designated as ‘input service distributor’ under rule 2(m). Definition:- “Input Service Distributor” has the meaning assigned to it in clause (m) of rule (2) of CENVAT Credit Rules, 2004:- “Input service distributor” means an office of the manu-facturer or producer of final products or provider of output service, which receives in-voices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or as the case may be, challan for the purposes of distri-buting the credit of service tax paid on the said services to such manufacturer or pro-ducer or provider, as the case may be;

Procedure of Registration as Input service Distributor :-

1. Application for registration would be submitted to Jurisdictional Central Excise Office, in duplicate in Form ST-1. Photocopy of the PAN and proof of address must be enclosed.

2. Copy of PAN card is necessary as a PAN based code (Service Tax Code) would be allotted to every assessee.

3. A person liable to pay service tax should file an application for registration with-in 30 days from the date on which the service tax on particular taxable service comes into effect or within 30 days from the commencement of his activity.

4. An assessee should get the registration certificate in form S.T.2 (registration number) within 7 days from the date of submission of form S.T.1, under normal circumstances

5. A fresh registration is required to be obtained in case of transfer of business to another person. Any registered assessee when ceases to provide the taxable ser-vice shall surrender the registration certificate immediately.

1 Like

satya (Executive Excise) (1839 Points)
Replied 25 March 2015

Dear Expertz,

pl clarify my doubt;

Our Excise auditors asking us to provide our ISD ST2 cerficate,

They are asking that our unit (branch) office address must be in that ISD ST2 Registration doc's.

is it necessary or not pl clarify?

suraj agarwal (article trainee) (25 Points)
Replied 02 November 2015

for making any branch or place of business eligible for Cenvat credit, the address of that place of business must be mentioned in the ISD registration certificate.