09 June 2010
What is the difference between service provider registered as Input Service Distributor and service provider registered on the basis of limit???? Explain the concept and benefits of both respectievely,
An input Service Distributor is a branch/Head Office/Administrative office. The actual service is not provided from these premises. However, bills for various services may be received at such places, although the relevant services might have been provided from other premises. Fro the purpose of distributing the credit charged in such bills, the premises is required to be registered as Input Service Distributor(ISD). This is the purpose and benefit of registration as ISD. In the absence of registration as ISD, the tax charged in the bills by the service providers can not be distributed to the actual service providing premises and the Cenvat to that extent would be lost.
The normal Service providing locstions shall have to get registered as output service providers on crossing the limit of Rs. 9 Lakhs. The benefit is, only on registration the person shall be eligible to charge Service tax in its bill. Else, the same has to be paid from own pocket.
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