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Service tax on allocation of common expenses

Queries 698 views 5 replies

If a company has multiple divisions and allocates the common expenses by way of a debit note to the divisions, what is the implication of service tax on that? 

Replies (5)

I am not understand what you would like to ask?. Whether you asked about Input Service Distributor (ISD) or something else

Please give some more details?

Let me elaborate with the help of example:

There is a company AB Ltd having two divisions A & B.  Both are reportable segments.  But there are some common expense in Division A which are shared with Division B and vice versa.

Now, Can the input service tax be availed by the division receiving the original bill from service providers in full or the same has to be shared between the divisions.

While raising the debit note on the other division, do they need to charge service tax?

 

If company AB taken centralizied registration, then yes expenses of division A can be shared between A & B.

yes, mr singh is right


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