Input service distributors allocate shared GST credits by recipient turnover and adjust distributions when supplier credit notes reduce available credit.

Input Service Distributors must distribute input tax credit available in a month during that month, report it in FORM GSTR-6 and not distribute more than the available credit. Credit attributable to one recipient goes only to that recipient; credit attributable to several or all recipients is allocated among the relevant recipients operational in the current year in proportion to their State or Union territory turnover for the relevant period. The allocation includes attributable recipients that are unregistered or make exempt supplies. Supplier credit notes are apportioned in the same ratio as the original distribution and adjusted against credit distributed in the month the note is included in FORM GSTR-6; any resulting shortfall is added to the recipient's output tax liability.

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