RCM under Input Service Distributor (2025)

[Raghav Mehra]

Queries on RCM under ISD

E.g. Regular Taxpayer (RT) is in UP and ISD is in UP also, RT has received legal services from lawyer in Delhi in July 25

so, RCM is applicable accordingly

RT has paid IGST under RCM in July 25 GSTR-3B and availed ITC also.

Now in Aug 25, this ITC is to be transferred to ISD

Please confirm the below points:

1. Credit transfer Invoice (CTI) [No E-Invoice] is to be prepared to transfer ITC to ISD, but in that tax would be CGST/SGST as ISD and RT both are in UP
2. This invoice would be added in RT GSTR-1 of Aug 25 in B2B to flow the ITC to GSTR-6A
3. In RT GSTR-3B the ITC claimed in July 25 (IGST) would be reversed.

AI Summary

Registered recipient can transfer RCM-paid IGST ITC to intra-state ISD via CTI showing CGST and SGST A registered recipient in UP who paid IGST under RCM for legal services received from outside the state and availed ITC in July may transfer that credit to an Input Service Distributor also in UP by issuing a Credit Transfer Invoice (no e-invoice required) showing CGST and SGST since both entities are intra-state. The CTI should be reported in the recipient's GSTR-1 for August as a B2B entry so it appears in the ISD's GSTR-6A, and the originally claimed IGST ITC reflected in July's GSTR-3B must be reversed.