ISD
This query is : Resolved
22 December 2010
What is the concept of input service distributor, actually i read law but it was confusing. so please let me know it practically by some of the examples.
22 December 2010
A service tax assessee/central excise assessee may have more than one premises/office.
Some of the office may be undertaking only administrative functions and the other premises are engaged in production/rendition of service.
The administrative office(commonly referred as Head Office, Corporate Office, Regional Office) normally receives bills for various input services and makes payment therefor. For example, an organisation may have a centralised system for insurance of equipments and payment thereof, although such services are actually consumed/utilised at the factory/branch.
The Service tax paid on such input services are available as Cenvat Credit to the factory/branch office. The cenvat can not be used at the Head Office as no production/provision service takes place at such office.
The concept of ISD is a mechanism to enable the Head Office/Administrative Office to distribute the Service tax paid on input services to the respective factory/offices providing office.
Some of the office may be undertaking only administrative functions and the other premises are engaged in production/rendition of service.
The administrative office(commonly referred as Head Office, Corporate Office, Regional Office) normally receives bills for various input services and makes payment therefor. For example, an organisation may have a centralised system for insurance of equipments and payment thereof, although such services are actually consumed/utilised at the factory/branch.
The Service tax paid on such input services are available as Cenvat Credit to the factory/branch office. The cenvat can not be used at the Head Office as no production/provision service takes place at such office.
The concept of ISD is a mechanism to enable the Head Office/Administrative Office to distribute the Service tax paid on input services to the respective factory/offices providing office.
22 December 2010
Thank You very much sir, clearly understood...no doubt :)
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