Cenvat credit utilisation by centralised registrant.

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SIDDHARTHA SANKAR ROY (Querist)
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27 October 2010 Dear Exparts,
I have a query regarding availment of CENVAT credit on GTA service by Centralised regitrant. For example say there are three manufacturing units 'A','B'& 'C' of the same industrial group.One of the unit say 'A' is centrally registered for payment of service tax on to GTA service in respect of all three units .'A' pays service tax on GTA service in cash for all three units, takes credit of the amount so paid and sets of against his own central excise duty liability.
Now question is without taking registration as ISD, whether it is legally correct on the part of 'A' to utilised the credit wholely aginst his own tax liability. Thanking you in advance. S.S.Roy

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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27 October 2010 In case of central registration there is no restriction if input credit is being used by the factory who is making the service tax on input.

Where service tax is to be transferred to other factory ISD is required. since in your case total amount is being used by the same factory who is making the payments, I think this is a correct practice.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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28 October 2010 The option of centralised registration also covers centralised credit and therefore the parctice seems in order even without the ISD registration.
Where one wishes to pass the same onto other units other than the centralised one then the ISD registration maybe necessary.

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