Input tax credit distribution requires monthly allocation, turnover-based apportionment, tax-head segregation, and invoice-based adjustments through GSTR-6 reporting.

Input Service Distributors must distribute available input tax credit in the same month, report it in FORM GSTR-6, and not distribute more than the available credit. Credit attributable to one recipient is allocated solely to that recipient, while common credit is apportioned among relevant operational recipients on a pro rata turnover basis, including exempt or unregistered recipients. Eligible and ineligible credit, as well as each tax component, must be separately distributed. Credit reductions, debit-note additions, incorrect allocations, and reverse-charge credit transfers are subject to prescribed invoice, credit-note, adjustment, and reporting requirements.

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