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 ISD registration required for common expenses at head office; ITC allocation and distribution compulsory. Mandatory ISD registration is required where multiple GST registrations under one PAN receive invoices for common services at a head office; such common expenses must be processed through the ISD and the related input tax credit allocated and distributed. The obligation is linked to proposed budget amendments and existing central GST definitions, and respondents describe the requirement as mandatory pending formal enactment.