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<h1>Input Service Distributor registration compulsory and input service tax credit must be distributed pro rata to recipients under prescribed rules.</h1> The ISD mechanism allocates Input Tax Credit on input services to distinct registered recipients only; it excludes goods. ISDs must obtain separate registration when receiving invoices for input services on behalf of other distinct persons, and distribute central or integrated tax credit (including reverse-charge and inter-state related credits) as prescribed. Distribution cannot exceed available credit, must be attributable to recipients, and where multiple recipients exist must be made pro rata by turnover for the relevant period. Reporting is via GSTR-6, with recovery and penalties applicable for excess or irregular distribution.