Input Service Distributor(ISD)
As per Rule 2(m) of Cenvat Credit Rules,2004
ISD is an:
-office of the manufacturer of final products or provider of o/put services
-which receives invoices issued under Rule 4A of ST Rules,1994
-towards purchase of input services
-and distribute the credit of such input service tax to the manufacturer or service provider
-by issuing invoices u/Rule 9 of CCR,2004.
Example-
Bata Ltd, a shoe manufacturing co. has its factories in Delhi & Mumbai
and “Marketing offices” in different parts of India like in Chennai,Kolkata,Bangalore and Ahmedabad.
The marketing offices use the services of various types like Advertising, Market Survey, Courier and other services, and pay service tax on the same.
So, Marketing Offices has incurred service tax on various services used by them……
So here an option available is that to distribute the credit of ST to various factories so that the same can be claimed by the factories in discharging their excise liability.
Bur for distributing the credit as such the marketing offices have to get them registered with ST department as Input Service Distributor…..
Manner of distribution of credit:
- The credit of ST to be distributed to manuf’ or service providing units in the ratio of their turnover…..In our above example in the ratio of turnover of factories Delhi and Mumbai..
- Credit of ST attributable to a service wholly used in one unit shall be distributed to that unit only.
For Example-If Delhi factory specifically instruct the marketing office of Ahmedabad to conduct a market survey for its exclusive use…then the credit of ST incurred for such an arrangement to be wholly distributed to Delhi factory only.
Return by ISD-
The ISD to file return in form ST-3 half yearly by the 30th of the month following the half year…..i.e. October 30 and April,30.. In the return, ISD is required to provide the particulars of various credit availed and distributed.
All other members rquested to participate in the discussion by suggesting some other points ....
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