Rule- 7 Manner of distribution of credit by ISD :
Input service distributor (ISD ) means an office of the manufacturer or producer of final products or  office of the provider of output services ,which receives invoices issued under rule 4A of the service tax rules ,1994 towards purchase of input services ; and issues invoice /bill/challan for distributing the credit of service tax paid on the said services to such manufacturers /producers/provider.

The manner of distribution of credit by ISD is as under :

(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 by one or more units 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 by a unit ,shall be distributed only to that unit; and

(d ) Credit of service tax attributable to service used by more than one unit shall be distributed pro-rata on the basis of turnover of such units during the relevant period to the total turnover of all its units ,which are operational in the current year ,during the said relevant period.