Rule 7 input service distributor

This query is : Resolved

hardik majithiya (Querist)
Follow

25 February 2013 ISD has credit of Rs 18 lacks which it wants to distribute to its branches

BRANCHES TURNOVER
Rajkot (manufacturing only exempted goods) 20 lacks
Baroda 40 lacks
Jamnagar 60 lacks
Surat 80 lacks

Now, how the 18 lacks will be distributed to BARODA?

Option 1:
18lacks*(40lacks/200lacks)

Or

Option 2:
18lacks*(40lacks/180lacks)

@VaibhavJ

@VaibhavJ (Expert)
Follow

26 February 2013 Hi,

Manner of distribution of credit by input service distributor - The input service distributor
may distribute the CENVAT credit in respect of the service tax paid on the input service to
its manufacturing units or units providing output service, subject to the following conditions,
namely:

a) The credit distributed against a document referred to in rule 9 does not exceed the
amount of service tax paid thereon;

b) Credit of service tax attributable to service used in a unit exclusively engaged in
manufacture of exempted goods or providing of exempted services shall not be distributed;

c) Credit of service tax attributable to service used wholly in a unit shall be distributed only
to that unit; and

d) Credit of service tax attributable to service used in more than one unit shall be
distributed prorata on the basis of the turnover of the concerned unit to the sum total of the
turnover of all the units to which the service relates.

Option one will be applied.

Thanks!!

@VaibhavJ

@VaibhavJ (Expert)
Follow

26 February 2013 Turnover means Dutiable, exempted and exported goods cleared + Value of services incl. exported
service (+) inputs removed as such (-) duty component

Turnover for previous month / quarter to be used for ( Rule 5 of CCR, 2004)

hardik majithiya

hardik majithiya (Querist)
Follow

26 February 2013 Thank you Vaibhav

hardik majithiya

hardik majithiya (Querist)
Follow

26 February 2013 Thank you Vaibhav

@VaibhavJ

@VaibhavJ (Expert)
Follow

26 February 2013 Thanks for acknowledgement.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now