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Corporate News *  GST registration cancellation without reasons amounts to ‘Economic Death’ of business: Supreme Court. *  No GST refund if appeal before GSTAT is filed late: Gujarat High Court. *  Mere upload of GST notice on portal not valid service, appeal limitation won’t start: Punjab & Haryana High Court. *  Taxpayer can’t be penalised for missing notices hidden under ‘Additional Notices/Orders’: Calcutta High Court allows fresh adjudication. *  State tax officer can’t issue GST SCN beyond CBIC-assigned jurisdiction: Bombay High Court stays recovery proceedings. *  Earlier 7.5% Pre-Deposit must count towards mandatory 10% for Appeal: Uttarakhand high court quashes CESTAT Order. *  Third Parties can’t challenge GST Advance Rulings merely due to financial impact: Karnataka HC *  GST SCN generated using AI tool quashed: Punjab & Haryana High Court *  Bank Attachment Quashed as Madras HC Quashes GST Order Issued Against Deceased Person *  ITC Blocking Order for Failure to Record ‘Reason to Believe’ U/R 86A Quashed: Allahabad High Court *  Govt Extends GSTAT Appeal Filing Deadline From 30 June to July 31, 2026 *  GST Demand on RWA Stayed: Allahabad High Court Questions Taxability of Electricity Distribution to Flat Owners *  CBIC Clarifies Jurisdiction After GST Registration Transfer: Earlier Proceedings Remain Valid, New Officer to Continue Action *  GST authorities’ certification not mandatory for reimbursement, but tax payment must be proven: Karnataka HC *  Contractor can’t seek gst reimbursement through writ when contract has arbitration clause: Karnataka HC *  Unsigned Order Is No Order in Law: AP HC Quashes GST Assessment Order for Want of Officer’s Signature *  Customs Can’t Levy Rs. 1.36 Crore Cost Recovery Charges Without Proof of Full-Day Officer Deployment: CESTAT  *  12% IGST Payable On Imported Dialysis Machine Parts: CESTAT *  Bombay High Court Admits Challenge to GST Limitation Extension Notifications; Grants Protection Against Coercive Recovery *  Criminal Case Can’t Run Parallel to GST Proceedings on Same Facts: Allahabad High Court *  Allahabad High Court Stays GST Detention Order; Directs Release of Vehicle and Goods on Deposit of Rs. 1.44 Lakh *  Service Tax Can’t Be Levied on Loss-Making Contracts: Gujarat High Court *  GSTN Mandates Ship-to GSTIN in e-Invoice and e-Way Bill APIs; Introduces Voluntary e-Way Bill Closure Facility from August 1, 2026 *  GST Appeal Can’t Be Rejected as Time-Barred When Taxpayer Was Pursuing Rectification Remedy: Telangana High Court *  Absence of E-Way Bill and Transport Documents Justifies Customs Seizure U/s 110: Gauhati HC *  Madras High Court Upholds GST Late Fee and Penalty for Non-Filing of Annual Return, Dismisses Challenge  *  GST Records, Purchase Documents Sufficient to Discharge Burden Under Customs Act: CESTAT Orders Release of 3.65 Kg Gold  *  No Sugar Cess Payable on Sugar Exported Out of India: CESTAT *  Road Construction Services Exempt and SCN Time-Barred: CESTAT Quashes Service Tax Demand Based Solely on Form 26AS  *  ITC Freeze Upheld After GST Dept Find Suppliers Were Allegedly Fake Bill-Trading Entities: Madras HC 
Subject News *  Input service benefits can’t be denied: CESTAT allows export refund despite MMTC acting as Canalising agency. *  No service tax demand without proof of service of SCN: CESTAT. *  Service tax demand quashed as dept. fails to prove service of SCN: CESTAT *  GST : Mere allegation of inadequate consideration of reply not enough to invoke writ jurisdiction: Delhi High Court *  Onerous conditions imposed for provisional release of seized imported goods shouldn’t amount to virtual denial of relief: CESTAT. *  GST SCN without alleging fraud cannot invoke sec. 74: Karnataka High Court quashes adjudication order. *  Extended Limitation Can’t Be Invoked Merely on Form 26AS Data: CESTAT *  Revenue-Sharing with Restaurants Not Taxable as Business Support Service: CESTAT *  R. 6(3) Option Can’t Be Forced on Taxpayer; CESTAT Quashes Rs. 12.36 Crore CENVAT Credit Demand *  Excise Duty | Power Consumption Alone Can’t Prove Clandestine Manufacture: Karnataka High Court *  Madras High Court Examines DGGI’s Authority to Issue GST Penalty Orders Under Section 122, Adds DGGI as Party *  Proceedings under omitted r. 96(10) can’t survive without saving clause: andhra pradesh high court quashes gst refund recovery *  Excise duty power consumption alone can’t prove clandestine manufacture: karnataka high court *  Madras high court rules GST show cause notices must disclose grounds for invoking extended limitation *  Court Can’t Direct Extension GST Return Deadlines or Waive Interest and Penalties: Karnataka High Court *  GST Notifications Can’t Go Beyond GST Council Recommendations: Madras High Court Quashes SCN on Branded Pulses *  Appeal Can’t Be Dismissed for Delay When Dept’s Own Order Mis-states Limitation Period: CESTAT *  No Evidence of KYC or Due Diligence Breach By Customs Broker: CESTAT Quashes Licence Revocation in Export Overvaluation Case *  Glucometers Are Chemical Analysis Instruments Classifiable Under Tariff Heading 9027: CESTAT *  Validity of Post-GST Service Tax Proceedings Upheld: Gujarat High Court Dismisses Challenge to S. 73 SCN *  Rectified GST Refund Applications Can’t Be Rejected as Time-Barred If Original Refund Claim Was Filed Within Limitation: Gujarat HC *  Service Tax Refund Can’t Be Denied as Time-Barred When Levy Itself Is Unconstitutional: Gujarat High Court *  Same Officer Can’t Act As Auditor & Adjudicator: Karnataka High Court *  Karnataka High Court Condones 324-Day Delay, Revives Customs Appeal in Jewellery Pilferage Case  *  Madras High Court Quashes GST Assessment Order Passed Ex Parte Despite Prior ITC Reversal; Lifts Bank Attachment *  Tobacco Process Doesn’t Amount to Manufacturing: Madras High Court Quashes Rs. 1.32 Crore Compensation Cess Demand  *  Recovery Notice Unsustainable After Voluntary Reversal of Unutilised Credit: CESTAT  *  GST | ‘System Generated’ SCN Without Officer Details Invalid: Allahabad HC  *  Electronic Records Without Statutory Certification Requirements Can’t Justify Undervaluation Allegations: CESTAT *  Madras High Court Stays GST Order, Finds Prima Facie Merit in Plea Against S. 74 Proceedings Based on S. 73 Intimation  

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GST Update 04.07.2016

SECTION-17 MANNER OF DISTRIBUTION OF CREDIT BY INPUT SERVICE DISTRIBUTOR (ISD):-

 
GST DAILY DOSE OF UPDATION:-
 
 
SECTION-17 MANNER OF DISTRIBUTION OF CREDIT BY INPUT SERVICE DISTRIBUTOR (ISD):-
 
 
Presently, there is concept of Input Service Distributor which is governed by provisions contained in Rule 7 of the Cenvat Credit Rules, 2004 wherein ISD may distribute cenvat credit of service tax paid in respect of input service to manufacturing units or units providing output service subject to conditions like credit distributed cannot exceed amount of service tax paid, credit of service tax attributable to service used exclusively in exempted goods/exempted services shall not be distributed, credit pertaining to a particular unit shall be distributed to that particular unit only, credit pertaining to more than one units will be distributed pro-rata on the basis of turnover of such units to the total turnover of all operational units. However, the provisions of ISD proposed in GST regime are altogether different.
 
 
It is provided that in case of CGST Act, ISD may distribute credit of CGST as IGST and IGST as IGST by issuing a prescribed document where distributor and recipient of credit are located in different States. This indicates that the ISD has option to distribute credit of CGST as IGST as it provides flexibility as regards distribution of credit. However, it is not possible for ISD at present to distribute credit of basic service tax as KKC or any other Cess.
 
 
Furthermore, it is provided that in case of CGST Act, ISD may distribute credit of CGST and IGST as CGST by issuing prescribed document where distributor and recipient of credit being business vertical are located in the same State. This again provides flexibility for distributing credit of IGST as CGST. It is pertinent to note that in the manner of utilization of input tax credit, it is being specified that in the leaked Draft of GST it was mentioned that credit of IGST may be first utilised for paying IGST and thereafter for CGST. Similarly, CGST will be first utilised for paying CGST and thereafter for IGST. Accordingly, since the cross utilization of CGST and IGST is permissible, the ISD has been given the flexibility as regards distribution of credit.
 
 
It is provided that in case of SGST Act, ISD may distribute credit of SGST as IGST by issuing prescribed document where distributor and the recipient of credit are located in different States.
 
 
It is further provided in case of SGST Act, ISD may distribute credit of SGST and IGST as SGST by issuing prescribed document where distributor and the recipient of credit are business vertical located in the same State. This again provides flexibility for distributing credit of SGST as IGST. It is pertinent to note that in the manner of utilization of input tax credit, it is being specified that in the leaked Draft of GST it was mentioned that credit of IGST may be first utilised for paying IGST, then for CGST and lastly for SGST. Similarly, SGST may be first utilised for paying SGST and thereafter for IGST. Accordingly, since the cross utilization of IGST and SGST is permissible, the ISD has been given the flexibility as regards distribution of credit.
 
 
Rest all conditions are continued in the proposed GST regime also except that input tax credit of service used exclusively in exempted goods/exempted services shall not be distributed. Consequently, it may be assumed that entire credit can be distributed in the proposed GST regime.
 
 

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