service tax on common intercom system by group company

Sharing of expenses among group companies/entities are general practices. Such sharing of expenses is done by issuing debit note on other group company. In this transaction there is no service rendered by one group company to another group company, it is merely an allocation of expenses out of common pool. As the service tax paid on such service is already paid by the corporate office, now again on sharing of such expenses cannot attract service tax again. Kindly note that cost incurred on staff and shared by group companies’ fall under the Business Auxiliary Services. In the case of Glaxo Smithline Pharmaceuticals Ltd V Commissioner of Central Excise (2005–TOIL-688-CESTATE), it was held that cost incurred on staff and shared by staff fall under Business Auxiliary Services. The other thing which comes to mind is that the HO should get itself registered as Input Service Distributor

Sharing of expenses among group companies/entities are general practices. Such sharing of expenses is done by issuing debit note on other group company. In this transaction there is no service rendered by one group company to another group company, it is merely an allocation of expenses out of common pool. As the service tax paid on such service is already paid by the corporate office, now again on sharing of such expenses cannot attract service tax again. Kindly note that cost incurred on staff and shared by group companies’ fall under the Business Auxiliary Services. In the case of Glaxo Smithline Pharmaceuticals Ltd V Commissioner of Central Excise (2005–TOIL-688-CESTATE), it was held that cost incurred on staff and shared by staff fall under Business Auxiliary Services. The other thing which comes to mind is that the HO should get itself registered as Input Service Distributor

Thanks . But what about CENVAT Credit ? If "A" has incurred some service , can it take the whole of input credit even if it has passed on some part of exp. as allocatable to "B" without raising serv.tax thereon.  Originally posted by :Pritam
"	Sharing of expenses among group companies/entities are general practices. Such sharing of expenses is done by issuing debit note on other group company. In this transaction there is no service rendered by one group company to another group company, it is merely an allocation of expenses out of common pool. As the service tax paid on such service is already paid by the corporate office, now again on sharing of such expenses cannot attract service tax again. Kindly note that cost incurred on staff and shared by group companies’ fall under the Business Auxiliary Services. In the case of Glaxo Smithline Pharmaceuticals Ltd V Commissioner of Central Excise (2005–TOIL-688-CESTATE), it was held that cost incurred on staff and shared by staff fall under Business Auxiliary Services. The other thing which comes to mind is that the HO should get itself registered as Input Service Distributor	"