CONCEPT OF INPUT SERVICE DISTRIBUTION IN GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 1-5-2018<\/p>\n
Input Service Distributor (ISD) in GST
\nThe term 'Input Service distributor' has been defined in section 2(61) of the CGST Act, 2017 to mean:
\n (a) An office of the supplier of goods and\/or services or both,
\n (b) Which receives tax invoices issued under Section 31,
\n (c) Towards receipt of input services,
\n (d) Who issues tax invoices or such other documents for distributing the credit of CGST, SGST, IGST paid on such services,
\n (e) To supplier of taxable goods and services having same PAN as that of such office.
\nFor the purpose of distribution of such credit, such ISD shall be treated as supplier of services.
\nThus, an ISD could be understood as a corporate or any such office of a multi unit registered dealer where the corporate of any such office known as ISD is providing service to other units having the same PAN, which are involved in supply of tax<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n y it. But point no. 4 of GSTR 6, the monthly return to be filed by ISD prescribes as = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n erstood by the following table: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e distributor being a banking company or financial institution or a non-banking finance company (NBFC), a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the information as mentioned above. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" CONCEPT OF INPUT SERVICE DISTRIBUTION IN GSTBy: – Dr. Sanjiv Agarwal Goods and Services Tax – GSTDated:- 1-5-2018 Input Service Distributor (ISD) in GST The term 'Input Service distributor' has been defined in section 2(61) of the CGST Act, 2017 to mean: (a) An office of the supplier of goods and\/or services or both, (b) … Continue reading “CONCEPT OF INPUT SERVICE DISTRIBUTION IN GST”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11625","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11625"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11625\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n “ISD will not have any reverse charge supplies. If ISD wants to take reverse charge supplies, then in that case ISD has to separately register as Normal taxpayer.”
\nThus, though there is no bar in the GST Act or rules for an ISD to receive services on which reverse charge is payable, but the restriction provided in return form GSTR 6, is in line with procedural restriction. In view of this restriction, it can be concluded that ISD is not eligible to receive any service like that of an Advocate, on which tax is payable on reverse charge basis.
\nClaiming and Distribution of Credit
\nAny input service distributor (ISD) is required to be registered under the provisions of GST law. It claims the input tax credit on all the input services availed by it. It will distribute the balance of input tax credit lying with it to all the suppliers under the same PAN as ISD and for the facilitation of whom ISD is work<\/p>\n
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\nLocation of Recipients
\nParticulars of the GST Act
\nNature of GST credits
\nTo be distributed as
\nSame State as ISD
\nCGST
\nCGST
\nCGST
\nSGST
\nSGST
\nSGST
\nDifferent State than ISD
\nCGST
\nCGST
\nIGST
\nIGST
\nSGST
\nSGST
\nIGST
\nTransfer of IGST credit
\nGST
\nIGST
\nIGST
\nConditions to be satisfied by an ISD
\nThe input service distributor (ISD) has to comply with the following conditions as laid in section 20(2) of the GST Act:
\n (a) The credit can be distributed by issue of invoice or any other prescribed document, such document will contain details as may be prescribed.
\n (b) The amount of credit distributed shall not exceed the amount of credit available with ISD.
\n (c) The credit of tax on some services attributable to a recipient will be distributed to that recipient only.
\n (d) The credit of input services distributable to more than one recipients will be distributed amongst those recipient units in proportion to their turnover during the relevant period to <\/p>\n
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\nIn terms of sub-rule (1A) of Rule 54, inserted w.e.f. 23.01.2018, a registered person, having the same PAN and State code as an Input Service Distributor, may issue an invoice or, as the case may be, a credit or debit note to transfer the credit of common input services to the Input Service Distributor, which shall contain the following details:
\n * name, address and Goods and Services Tax Identification Number of the registered person having the same PAN and same State code as the Input Service Distributor;
\n * a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters -hyphen or dash and slash symbolised as ―-‖ and ―<\/p>\n
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