Mandatory Registration under ISD

[POOJA AGARWAL]

Dear Experts Please guide

A company has multiple GSTN under same PAN, and the invoices for commonly used services such as Audit, Subscriptions etc are received at head office.

Now, is it mandatory for the head office to allocate the expenses and the distribute the ITC in proportion of the turnover, or the same is optional?

[KASTURI SETHI]

It will be  mandatory w.e.f. 1.4.25.

[Shilpi Jain]

ISD would be mandatory from 1.4.25 the moment you have invoices related to common expenses received at one particular registration.

[KASTURI SETHI]

Yes as per proposed amendment in the Budget for 2025-26. Also see Section 20(2) of CGST Act read with Section 2(61).  Not optional as per facts detailed in the query.

Still to be enacted.

[POOJA AGARWAL]

Thank You

AI Summary

Mandatory Allocation of Expenses and ITC Distribution by Head Office Required Under CGST Act from April 2025 A company with multiple GST registrations under the same PAN receives invoices for common services at its head office. The query is whether it's mandatory for the head office to allocate expenses and distribute the Input Tax Credit (ITC) based on turnover. Experts responded that from April 1, 2025, it will be mandatory to do so as per the proposed amendments in the 2025-26 Budget and relevant sections of the CGST Act. This requirement is not optional when common expenses are invoiced to a single registration.