Input Service Distributor under GST

Posted on 20 April 2023 Category : GST terms

What is Input Service Distributor under GST

In this article, the information about Input Service Distributor under GST is explained here.

ISD Ledger

Input Service Distributor under GST

The concept of Input Service Distributor (ISD) is provided in GST too. It is defined as 'an office of supplier of goods and/or services, which has received input services under the cover of tax invoice, and is allowed to distribute the said tax credit to the supplier of goods and/or services registered under the same PAN'. This indicates that the ISD is an office:

Which can be a head office, administrative office, corporate office, regional office, depot, and so on, belonging to registered taxable person who intends to distribute the credit
Which receives tax invoices towards the receipt of inward supply of services
Which distributes the tax credit paid of inward supplies of services to the branch units which have consumed the services, and issues invoices for the distribution of credit

Registration under GST

An ISD is required to obtain a separate registration. The registration is mandatory and there is no threshold limit for registration for an ISD. Businesses who are already registered as an ISD under the existing regime (i.e. under Service Tax), will be required obtain a new ISD registration under GST. This is because, the existing ISD registration will not be migrated to the GST regime.

Manner of Distribution

Under GST, on an intrastate transaction, CGST and SGST will be applicable. In case of transaction within a union territory, CGST and UTGST will be applicable. IGST will be applicable in case of interstate transactions and imports. The following are the scenarios of distribution of credit by an ISD:

ISD and the recipient of credit are located in the same state
ISD and the recipient of credit are located in different states

The unit to which the input tax credit is distributed is referred to as the 'recipient of credit'.

ISD and recipient of credit are located in the same state

When the ISD and recipient of credit are located in the same state/union territory, the input tax credit of IGST, CGST, SGST, and UTGST should be distributed to the recipient in the following

Return Forms under GST

Return Type	Frequency	Due Date	Details to be furnished
Form GSTR-6A	Monthly	0n 11th of succeeding month	Details of inward supplies made available to the ISD recipient on the basis of FORM GSTR-1 furnished by the supplier
Form GSTR-6	Monthly	13th of succeeding month	Furnish the details of the input credit distributed