Input Service Distributor credit distribution must be documented and apportioned pro rata by recipient turnover within the relevant period.

The section requires an Input Service Distributor to distribute input tax credit by issuing a prescribed document showing amounts; credits must not exceed available balances and must be allocated to recipients to whom the input services are attributable. Where multiple recipients are involved, distribution is made pro rata based on each recipient's State or Union territory turnover during the relevant period relative to the aggregate turnover of attributable, operational recipients. The provision defines relevant period, recipient of credit (suppliers with the same PAN as the ISD), and turnover for allocation purposes.

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