Input Tax Credit, Service Tax

[Harsh Jindal]

A Manufacturing firm having head office in Delhi and manufacturing plant in Jaipur. HO is registered as input service tax distributor. Jaipur plant has separate excise duty and service tax registeration.

Now Jaipur plant took some services from one of Delhi's service vendor. Vendor has charged service tax on bill. Service was provided in Jaipur plant. But the bill is in name of our head office at Delhi.

So please tell me who is elligible to take credit? - Wether Jaipur (where service was given) or it is Delhi (in whose name bill was raised).

Posts / Replies

[Pradeep Khatri]

Under Rule 7 of the Cenvat Credit Rule, if the services which are being provided to HO are fully attributable at Units which are manufactuing dutiable finished goods then, full allocation of Tax can be made to such unit.

 

[Harsh Jindal]

Can HO allocate the credit to Jaipur unit?

And Can HO utilize the credit for his taxability?

[Pradeep Khatri]

Yes, HO can allocate this service tax amount to Unit but after making payment to the service provider.  You would have to issue an Invoice for such allocation to the unit.  HO will not avail the Credit as credit needs to be transferred from HO to Unit.