An Input Service Distributor means an office of the supplier of goods or services or of both. It receives tax invoices which are issued under section 31 towards the receipt of input services.
It issues a document which is required for the purpose of distributing the credit of CGST, SGST, IGST or UTGST which is paid on services.
Features of ISD:
- Companies may have their head office at one place and units at other places which might be registered separately, but there is no implication by law that an ISD must only be the head office.
- There is also no limit on the number of offices that can be registered as ISD. Hence, a single company can have many regional offices based on business requirements.
Rules ISD follows:
- Recipients of credit or the taxpayers having the same PAN are issued ISD invoice.
- The credit of integrated tax should also be distributed as an integrated tax irrespective of the location of the ISD or the aggregate of Central tax, State tax and Union territory tax, as integrated tax.
- Each type of tax has to be distributed through a separate ISD invoice.
- Credit distributed should not exceed the credit which is available for distribution.
- Tax paid on input services used by a particular location is to be distributed only to that location.
- The credit of tax paid on input service used by more than one location is to be distributed to all of them.
- The period to be considered for computation is the previous financial year of that location.
How to register as ISD?
- If you have to apply for an ISD, you can do that with form GST REG-1.
- There is no threshold limit for registration for an ISD.
- The other locations can be registered separately.
Requirements to register for ISD:
- Name, address and GSTIN of the Input Service Distributor.
- Date of its issue.
- A digital signature of the Input Service Distributor or of his authorised representative.
- An invoice to indicate that it is issued only for distribution of input tax credit.
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