TaxTMI 
TaxTMI 
Manner of Distribution of Credit By Input Service Distributor (ISD)
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....hin such time and subject to such restrictions and conditions as may be prescribed. (3) The credit of central tax shall be distributed as central tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a document containing the amount of input tax credit, in such manner as may be prescribed. 18.2 Rule 39. Procedure for distribution of input tax credit by Input Service Distributor. - (1) An Input Service Distributor shall distribute input tax credit in the manner and subject to the following conditions, namely :- (a) the input tax credit available for distribution in a month shall be distributed in the same month and the details thereof shall be furnished in FORM GSTR-6 in accordance with the provisions of Chapter VIII of these rules; (b) the amount of the credit distributed shall not exceed the amount of credit available for distribution; (c) the credit of tax paid on input services attributable to a recipient of credit shall be distributed only to that recipient; (d) the credit of tax paid on input services attributable to more than one recipient of credit shall be distributed amongst such recipients to whom the input service i....
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....y in which the Input Service Distributor is located, be distributed as input tax credit of central tax and State tax or Union territory tax respectively; (ii) in respect of a recipient located in a State or Union territory other than that of the Input Service Distributor, be distributed as integrated tax and the amount to be so distributed shall be equal to the aggregate of the amount of input tax credit of central tax and State tax or Union territory tax that qualifies for distribution to such recipient as referred to in clause (d) and (e); (k) the Input Service Distributor shall issue an Input Service Distributor invoice, as provided in sub-rule (1) of rule 54, clearly indicating in such invoice that it is issued only for distribution of input tax credit; (l) the Input Service Distributor shall issue an Input Service Distributor credit note, as provided in sub-rule (1) of rule 54, for reduction of credit in case the input tax credit already distributed gets reduced for any reason; (m) any additional amount of input tax credit on account of issuance of a debit note to an Input Service Distributor by the supplier shall be distributed in the manner and subject to the conditi....
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....all be- (a) if the recipients of credit have turnover in their States or Union territories in the financial year preceding the year during which credit is to be distributed, the said financial year; or (b) if some or all recipients of the credit do not have any turnover in their States or Union territories in the financial year preceding the year during which the credit is to be distributed, the last quarter for which details of such turnover of all the recipients are available, previous to the month during which credit is to be distributed; (ii) the expression "recipient of credit" means the supplier of goods or services or both having the same Permanent Account Number as that of the Input Service Distributor; (iii) the term "turnover", in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entries 84 and 92A of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.] 18.3 Distribution of credit by ISD. A. Different States: As per Rule 39(1)(e) and (f) of the CGST Rules,....
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....makes a supply to one of its units. That's to say, movement of goods or services between two units of same business are "deemed as supply", with both the units having different GST registrations. This allows the supplying business unit to recover the costs, even after being treated as separate entities. Input Service Distributor Input Service Distribution (ISD) in GST transactions is a mechanism that allows businesses to distribute the benefit of Input Tax Credit on all input services received by one business unit amongst the other units of a same entity. The Major differences between Cross Charge and ISD is as given in the table below: Differences Input Service Distributor (ISD) Cross Charge Mechanism Nature of Transaction Transfer of ITC on Input Services, received from a third party. GST is charged on the transaction of goods or services from one business unit to another. Applicability ISD as the definition itself indicates, is only for services provided by a third person to different units of a Business entity. Cross Charge is both on Goods and Services transferred from one unit to another. Compliance A unit registered as ISD has to file GSTR 6 and GSTR 6A. I....