Distribution of CENVAT by Input Service Distributor

Similar documents
CENVAT CREDIT. Join with us SIGNIFICANT NOTIFICATIONS/CIRCULARS ISSUED BETWEEN TO

Availment of Credit based on computer generated invoice: Pre and Post Budget

APPLICABLE FROM 16/03/2016

Input Tax Credit Rules

Input Tax Credit Rules

Chapter 4- CENVAT Credit Rules, 2004

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB- SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE

Notification No. 18/2012 Central Excise (N.T.)

APPLICABILITY OF SERVICE TAX:

Cenvat Credit Rules 2004

REFUND UNDER SERVICE TAX

TRANSITIONAL PROVISIONS. CA. PUNEET OBEROI FCA, DISA

ITC Credit- GST Adapted from Standardised PPT on Revised Model GST Law (Nov 2016)

Applicability of CST/ VAT on E-Commerce Transactions:

Taxation of Software Sale of Goods or Services- Legal Controversy

ANALYSIS OF AMENDMENT IN CENVAT Credit Rules, 2004:

Provisions under GST TRANSITIONAL PROVISIONS. By:- Puneet Agrawal B. Com (H), CA, LLB Partner Athena Law Associates

SERVICE TAX ON CO-OPERATIVE SOCIETY & BANKS

ISSUES RELATED TO CENVAT CREDIT IN FILING SERVICE TAX RETURNS

Form E.R.1 [ See rule 12 of the Central Excise Rules, 2002 and rule 9(7) of CENVAT Credit Rules, 2004 ]

CHAPTER---- Input Tax Credit. 1. Documentary requirements and conditions for claiming input tax credit

2015-TIOL-1036-CESTAT-MUM IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH, MUMBAI COURT NO.I

BUDGET ANALYSIS All right Reserved with Bizsolindia Services Pvt. Ltd.

2015 (1) TMI CESTAT NEW DELHI

Procedure for Jewellery Industry

REFUND AND REBATE - A service tax perspective

DRAFT. Revised format for Excise and Service Tax Return

Input Tax Credit (ITC)

CENVAT CREDIT RULES, By CA RAJIV LUTHIA

Input Tax Credit & Refunds under GST Law. Presentation by CA. Gaurav V Save WIRC of ICAI June 28, 2017

GENERAL PROCEDURES UNDER CENTRAL EXCISE

F. No. 137/85/2007-CX. 4 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs New Delhi

Analysis of Short Term Accommodation Service Introduced by Finance Act, 2011

CENVAT CREDIT Recent Court Rulings Presented by: Ca. Jayesh Gogri

INPUT TAX CREDIT (ITC) PROVISIONS. CA Nammitta Gangwal Nilange LCS, DISA, GST Faculty R. I. Nilange & Co. Chartered Accountant

Institute of Chartered Accountant of India

REGISTRATION FOR THE PURPOSES OF SERVICE TAX

SUGGESTIONS ON DRAFT GST RULES (April 2017)

CA Pritam Mahure. May 14

PROVISIONS RELATED TO INDIRECT TAXES NEW TAX AUDIT REPORT. Ex-Chairman, NIRC /8/

FINAL COURSE SUPPLEMENTARY STUDY PAPER DIRECT TAX LAWS AND INDIRECT TAX LAWS BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

Input Service Distributor and Concept of Cross Charge. As per section 2(61) of the CGST Act, Input Service Distributor has following characteristics

ROUTINE PROCEDURES

CENTRAL EXCISE CENVAT Credit Rules 2004

INDIRECT TAX LAWS & PRACTICE. Paper-18. Syllabus Set-1. Answer of Postal test Paper. Set-1.

New Year Bonanza - New Simplified Scheme - For Refund of Input Service Tax used for Export of Goods

(vii) CTD shall not be issued in favour of a dealer to whom invoice was issued for the same goods before the appointed date.

Hiregange& Associates

fgekpy izns'k ljdkj 30th June, 2017 Shimla , the

Transitional Provisions in GST... by Raman Gupta

CENVAT Credit for service providers. By CA Rahul S. Jain

Goods and Services Tax CA. Sathish V & CA. Krishna J August 2017

Todays Coverage. CA Madhukar N Hiregange 2

Procedures under GST BY CA LAKSHMI G K. Hiregange & Associates

Transitional Provisions

GOODS AND SERVICE TAX (GST) TRANSITIONAL PROVISIONS COMPILED AND PREPARED BY : CA SAGAR THAKKAR

Refunds and Rebates in Service Tax

THE MIZORAM PROFESSIONS, TRADES, CALLINGS AND EMPLOYMENTS TAXATION RULES, 1996 N O T I F I C A T I O N

Indirect Tax- Latest Judicial Precedents

WIRC of Institute of Chartered Accountants of India

The manufacturer or the service provider may procure the inputs or capital goods with the intention of using the same

ITC Concepts. Features of ITC Provisions. ISD & its Features

DG Education (P) Ltd [CENVAT : Service Provider] SERVICE PROVIDER:

Service Tax Recent Budget Amendments. By: A.Saiprasad B.Com,LLB,ACA,DISA,AMIMA Advocate

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZZETE OF INDIA (EXTRAORDINARY)]

Transitional Provisions

Input Tax Credit. Chapter III FAQS. Eligibility and conditions for taking Input Tax credit (Section 16)

UNION BUDGET CENTRAL EXCISE

SEMINAR ON ISSUES IN SERVICE TAX RETURNS

GST - Input Tax Credit. Keval Shah at Bandra Kurla Complex, WIRC of the ICAI. Agenda for the day. Provisions of Input Tax Credit

SERVICE TAX. 2.1 It has been proposed in the Finance Bill to extend the levy of service tax to following new services,-

THE MIZORAM PROFESSIONS, TRADES, CALLINGS AND EMPLOYMENTS TAXATION RULES 1996.

PROVISIONS RELATED TO INDIRECT TAXES TAX AUDIT REPORT. CA Vishal Garg, Ex-Chairman, NIRC /14/2015 1

MEMORANDUM ON MODEL GST LAW

CENTRAL EXCISE RULES,

FORM R. T. 12 (RULE. Financial Year. Total Quantity. Total Closing Value of Quantity Balance goods Cleared. Quantity of duty free clearances

GST Input Tax Credit [Chapter V]

TRANSITIONAL PROVISIONS

CONTENTS CENVAT CREDIT SCHEME RULE 2 : DEFINITIONS I-7. Chapter-heads I-5 Rule-wise Index I-23

CA Rajesh Kumar TR B com, LLB, FCA, DISA(ICA)

SERVICE TAX REGISTRATION, PAYMENTS & RETURNS

FAQ on filing of Transition form

SERVICE TAX NOTIFICATION

Taxation of Gift- Under Income Tax

EXPORT BENEFITS UNDER SERVICE TAX CA. MANINDAR KAKARLA

POST-BUDGET MEMORANDUM 2014

CLARIFICATION ON ISSUES RELATING TO CENVAT CREDIT RULES 2004

SIRC of ICAI. GST - TRANSISTIONAL PROVISIONS By CA GANESH PRABHU B B.Com, MFM, F.C.A, LL.B, DISA

PROFESSIONAL DEVELOPMENT PROGRAM 2015 (PDP) By:

CENTRAL EXCISE, RULES,

Tax Invoice, Credit and Debit Notes

sought to examine eligibility to credit on the construction sector credit to service providers.

Goods & Service Tax. Mega Seminar on GST The Institute of Chartered Accountants of India. August 31, Discussion by: CA Gaurav Gupta

Registration, returns & TRANSITIONAL PROVISIONS

Respondent preferred an appeal there against before the Commissioner (Appeals), which by an order dated was allowed. Appellant preferred an

Transitional Provisions

SEMINAR ON GST. By S. S. GUPTA CHARTERED ACCOUNTANT

INDIRECT TAXES Service Tax Case Law Update

Tax Invoice, Credit and Debit Notes

GST MATCHING & REVERSAL

Transcription:

Distribution of CENVAT by Input Service Distributor This rule has been changed by Notification no. 18/2012 dated 17.3.2012 applicable from 1.4.2012. Now this has been made more logical and rational as the distribution of CENVAT to various units has been made realistic. RULE 7 & 7A Manner of Distribution of Credit by ISD 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 pro rata on the basis of the turnover during the relevant period of the concerned unit to the sum total of the turnover of all the units to which the service relates during the same period. 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 1

Explanation 1 - For the purposes of this rule, unit includes the premises of a provider of output service and the premises of a manufacturer including the factory, whether registered or otherwise. Explanation 2 - For the purposes of this rule, the total turnover shall be determined in the same manner as determined under rule 5. Explanation 3. - (a) The relevant period shall be the month previous to the month during which the CENVAT credit is distributed. (b) In case if any of its unit pays tax or duty on quarterly basis as provided in rule 6 of Service Tax Rules, 1994 or rule 8 of Central Excise Rules, 2002 then the relevant period shall be the quarter previous to the quarter during which the CENVAT credit is distributed. (c) In case of an assessee who does not have any total turnover in the said period, the input service distributor shall distribute any credit only after the end of such relevant period wherein the total turnover of its units is available. 7A. Distribution of credit on inputs by the office or any other premises of output service provider. (1) A provider of output service shall be allowed to take credit on inputs and capital goods received, on the basis of an invoice or a bill or a challan issued by an office or premises of the said provider of output service, which receives invoices, issued in terms of the provisions of the Central Excise Rules, 2002, towards the purchase of inputs and capital goods. (2) The provisions of these rules or any other rules made under the Central Excise Act, 1944, as made applicable to a first stage dealer or a second stage dealer, shall mutatis mutandis apply to such office or premises of the provider of output service 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 2

1.1 input Service Distributor Manufacturer or service provider may have its head office or regional office at different places. These office may receive the services on behalf of their factory or units which may be transferred to them as per the rule stated above. Such head office or regional offices can be registered as Input service distributor with central excise department. If the assessee distribute the CENVAT as ISD, he has to apply for registration in Form ST-1. Provision of registration was introduced w.e.f. 7.6.2005. During the period 10.9.2004 to 7.6.2005, the HO distributed the credit even without registration- prima facie view in Hindustan Coca Cola Beverage V.CCE [2011] 32STT 266 ELT 347 [ CESTAT] In my view, registration and distribution of CENVAT credit are two independent aspect. Even if registration was obtained later, Cenvat credit of prior period at ISD can be distributed, if otherwise eligible. Who is Input Service Distributor As per Rule 2(m) of the Cenvat Credit Rules, Input Service Distributor means a) an office managing the business of manufacturer or producer of final product or provider of output service b) which receive invoices under rule 4A of STR,1994 towards purchase of input services and c) issue invoice, bills or as the case may be, challan for the purpose of distributing the credit of service tax paid on the aid services to such manufacturer or producer or provider, as the case may be. Documents eligible for Cenvat Credit distribution - Invoice, bill or challan as per Rule 9(1)(g) issued by ISD under Rule 4A of STR. Shri Ram Pistons V CCE [2012] 281 ELT 90 CESTAT. Distribution of credit even if invoice prior to registration - there is no bar in the rule 7 of CCR for distributing of credit of invoices prior to date of registration as Input Service Distributor- Beico Industries Ltd v CCE [2012] 286 ELT 689 CESTAT SMB. Requirement of Invoice Bill or challan as per rule 4A[2] of STR, requirement are as follows ; 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 3

It shall be signed by authorized person The document should be for each recipient of credit distributed Document should be serially numbered Invoice Should contain the Following Details Name, address and registration no. of the person providing input services and S.N., date of invoice, bill or challan issued by service provider under Rule 4A (1) Name and address of input service distributor. Name, address of the recipient to whom credit distributed Amount of credit distributed Meaning of Relevant Period means a] month previous to the month during which Cenvat credit is distributed. B] in case if any of its unit pays tax or duty on quarterly basis as provided in rule 6 of STR, 1994 or rule 8 of the central excise rules,2002 then the relevant period shall be quarter previous to the quarter in which Cenvat credit has been distributed. C] in case the assessee does not have any turnover in the said period, in that case ISD shall distribute the Cenvat only when unit having turnover. Calculate the ratio on monthly basis based on turnover of previous quarter or month 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 4

Turnover shall be determined as provided in rule 5 and shall be determined on for the month or quarter previous to the month or quarter during which the Cenvat credit is distributed. Turnover so calculated would be on ex duty i.e. not inclusive of taxes and duty on the goods and services supplied. Turnover as per rule 5 is as follows: Export turnover of services = payment received during the relevant period for export services+ export service whose provision has been completed for which payment has been received in advance in any period prior to relevant period advances received for export of services for which the provision of services has not been completed during the relevant period Distribution of credit in new unit when there is no turnover In case of an assessee who does not have any turnover in the said period as in case of new company, ISD shall distribute any credit only after the end of such relevant period wherein total turnover of its unit is available. In case of new unit wherein any credit is exclusively used, the credit can be distributed in total to such unit. Responsibilities of Input Service Distributor File half yearly return on due date, in prescribed format ST-3 [ Rule 9(10)] Penalty can be imposed on the ISD under rule 15 for taking wrong credit. Credit wrongly taken can be recovered under rule 14. Suggestive Format of Invoice Input Service Distributor Annexure 1 Article written By CA. Sanjeev Singhal, FCA, DISA [ ICAI] 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 5

Annexure- 1 Suggestive Format of Input Service Distributor Invoice Input Service Distributor Invoice Name,Address and Registration no. of Input Service Distributor Name and Address of the recipient of the credit distributed Detail of the person providing the services Serial No. Dated : Amount of Credit Distributed Name Address Registration no. Value of Service tax Service Tax PEC SHEC Service Tax PEC SHEC 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 6

Signature of Input Service Distributor or his authorised signatory with Stamp. 1011, LGF, Sector 15 II, Gurgaon. Haryana. Page 7