An office of the Supplier which receives tax invoices towards the receipt of input services and issues a document which distributes ITC paid on such services to a Supplier having the same PAN as the Input service distributor office.
The Input service distributor shall distributes the ITC, by issuing a document containing the amount of ITC being distributed.
ISD can distribute the ITC subject to these conditions:
- If the recipients have turnover in their States in the preceding financial year, then it means the year during which credit is to be distributed, the financial year.
- If some or all recipients do not have any turnover in their States in the preceding financial year, the year during which credit is to be distributed, then it means the last quarter for which details of such turnover of all the recipients are available, preceding the month during which credit is to be distributed.
PROCEDURE FOR DISTRIBUTION OF ITC BY ISD
- The ITC available for distribution in a month shall be distributed in the same month and its details should be given in the FORM GSTR-6.
- The ISD must distribute the eligible and ineligible ITC amount separately.
- The ITC of CGST, SGST and IGST must be distributed separately.
If the amount of ITC distributed by an ISD is reduced later on, the procedure for reducing the credit will be the same as for the reduction in case of credit note.
The Input service distributor must be on the basis of the ISD credit note, issue an ISD Invoice to the recipient entitled to such credit and include them in the return in FORM GSTR-6 for the month in which such credit note or invoice was issued.
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