INPUT SERVICE

DISTRIBUTOR &
INPUT CREDIT
DISTRIBUTOR
ROLL NO- 47

INPUT SERVICE

Input service means any service, (i) used by a provider of taxable service for
providing an output service; or
(ii) used by a manufacturer, whether
directly or indirectly, in or in relation to the
manufacture of final products and clearance
of final products up to the place of removal.
Inclusive part of definition of input services
granted on inward capital goods and
outward transportation upto the place of
removal.

INPUT SERVICE

Input service is Eligible only if used for (a)

service portion of works contract (b)
construction service of buildings or
residential complex.
Credit of service tax on input services is
available on receipt of invoice.
Services related to motor vehicle like renting,
repairs, hiring, insurance not eligible.
Services primarily for personal use or
consumption of employees are not eligible.

INPUT SERVICE DISTRIBUTOR & INPUT

CREDIT DISTRIBUTOR

Service tax paid at head office,

Regional/Branch office can be utilised through
mechanism of Input service distributor.
The Input Service Distributor can distribute
Cenvat credit of service tax availed by it by
issuing an invoice to its manufacturing units or
units providing output service.
The distribution of credit by Input Service
Distributor to be in proportion to ratio of
turnover of previous financial year.

INPUT SERVICE DISTRIBUTOR & INPUT

CREDIT DISTRIBUTOR

Input Service Distributor has to file half

yearly return within one month from end
of half year.
Input Service Distributor can distribute
credit on duty paid on inputs (goods) if
invoice received at HO and distributed to
other places.

UTILISATION OF CENVAT
CREDIT

Utilisation means using that credit for

payment of excise duty on final product or
service tax on output services.
UTILISATION FOR ANY ELIGIBLE PURPOSE
Any duty on any final product manufactured
by manufacturer.
Payment of amount if inputs are removed
as such or after partial processing.
Payment of amount on capital goods if they
are removed as such.

UTILISATION OF CENVAT
CREDIT

Payment of amount, if goods are

cleared after repairs/rework.
Service tax on output service.
Payment under Cenvat Credit Rule 6.
Reversal of Cenvat credit, if assessee
opts out of Cenvat.
Payment of amount if goods sent for
job work are not returned within 180
days.

UTILISATION OF CENVAT
CREDIT

Cenvat credit cannot be utilised when

service tax is payable under reverse charge.
Credit only if inputs and services received
upto end of month.
Credit of Basic excise duty, CVD, Special
CVD and service tax can be utilised for
payment of any duty on final product or
service tax on output services.
Credit of special CVD can be utilised by
manufacturer but not by service providers.

MANUFACTURE OF EXEMPTED AS WELL AS

TAXABLE GOODS AND PROVIDER OF BOTH
EXEMPTED AND TAXABLE SERVICES

Cenvat Credit is available only if final product is

dutiable or service tax is payable on output
service.
OPTIONS AVAILABLE TO MANUFACTURER OF
EXEMPTED AS WELL AS TAXABLE GOODS
AND PROVIDER OF EXEMPTED AND TAXABLE
SERVICES
(a) maintain separate inventory and accounts of
receipt and use of inputs and input services used
for exempted goods/exempted output services.
(b) pay amount equal to 6% of value of exempted
goods and 7% of value of exempted services.

MANUFACTURE OF EXEMPTED AS WELL AS

TAXABLE GOODS AND PROVIDER OF BOTH
EXEMPTED AND TAXABLE SERVICES

(c) Pay an amount equal to

proportionate Cenvat credit attributable
to exempted final product/exempted
output services.
(d) Maintain separate accounts for inputs
and pay amount.
Option to be uniform and cannot be
changed during the year.

PROCEDURE IF ASSESSEE OPTS FOR PROPORTIONATE

REVERSAL

Inform option to superintendent.

Provisional payment of amount every month.
No provisional payment if there was no
manufacture or provision of service in previous
year.
Determining actual amount after end of
financial year.
Pay difference if amount short paid. If amount
is found to be short paid, the difference should
be paid by 30th June of succeeding year.
Self adjustment if excess amount was paid

PROCEDURE IF ASSESSEE OPTS FOR

PROPORTIONATE REVERSAL

Intimation to Superintendent about self adjustment

or payment of difference.
Special provisions on availment in case of
providers of Banks and NBFC 50% of Cenvat Credit
is eligible.
Common provisions for rule 6(3) and 6(3A)
Payment of amount means Cenvat not taken.
The amount shall be paid by 5th/6th of following
month/quarter.
If assessee does not pay the amount as it can be
recovered along with the interest if the credit is
wrongly taken.

PROCEDURE IF ASSESSEE OPTS FOR

PROPORTIONATE REVERSAL

Partial use of capital goods for exempted

products or exempted service permitted.
No reversal or payment of amount if
excisable goods cleared for exports,
EOU, SEZ, UN agencies etc.
No reversal or payment of amount if
taxable service provided to SEZ unit or
SEZ Developer.
No reversal or payment of amount if
service is exported.

REMOVAL OF INPUTS FOR SALE OR JOB WORK

Removal of input on which Cenvat credit

was taken can be removed.
Inputs on which Cenvat credit availed can be
sent outside for job work. These should
come back within 180 days.
Direct dispatch of inputs to place job worker
without bringing the inputs in factory.
Waste generated at the end of job worker no
excise duty is payable on such scrap by
Principal Manufacturer.

RECORDS AND RETURNS UNDER CENVAT

Records of Cenvat credit.

Returns of details of Cenvat credit
availed Principal Inputs and utilization of
principal inputs in forms ER-1 to ER-7 is
to be submitted.
Revised return of Cenvat credit can be
submitted within 60 days.
Dealer/service provider/input service
distributor is also required to submit
returns.