{"id":12970,"date":"2021-06-20T12:48:03","date_gmt":"2021-06-20T07:18:03","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=12970"},"modified":"2022-01-27T15:21:11","modified_gmt":"2022-01-27T09:51:11","slug":"itc-rules-for-input-service-distributor","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/","title":{"rendered":"ITC Rules for Input Service Distributor"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d016cfe112a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d016cfe112a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#ITC_Rules_for_Input_Service_Distributor\" title=\"ITC Rules for Input Service Distributor\">ITC Rules for Input Service Distributor<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#BRIEF_INTRODUCTION\" title=\"BRIEF INTRODUCTION\">BRIEF INTRODUCTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#MEANING_UNDER_GST_ACT\" title=\"MEANING UNDER GST ACT\">MEANING UNDER GST ACT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#MANNER_OF_DISTRIBUTION\" title=\"MANNER OF DISTRIBUTION\">MANNER OF DISTRIBUTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#CONDITIONS\" title=\"CONDITIONS\">CONDITIONS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#DISTRIBUTION_OF_CREDIT\" title=\"DISTRIBUTION OF CREDIT\">DISTRIBUTION OF CREDIT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#RECEIPT_OF_CREDIT\" title=\"RECEIPT OF CREDIT\">RECEIPT OF CREDIT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#CONDITIONS_FOR_DISTRIBUTION\" title=\"CONDITIONS FOR DISTRIBUTION \">CONDITIONS FOR DISTRIBUTION <\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#EXAMPLE\" title=\"EXAMPLE\">EXAMPLE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#EXAMPLE-2\" title=\"EXAMPLE\">EXAMPLE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#EXAMPLE-3\" title=\"EXAMPLE\">EXAMPLE<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#WHAT_IS_MEANING_OF_RELEVANT_PERIOD\" title=\"WHAT IS MEANING OF RELEVANT PERIOD ?\u00a0\">WHAT IS MEANING OF RELEVANT PERIOD ?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#TURNOVER_IN_AN_EXCEEDINGLY_STATEUT\" title=\"TURNOVER\u00a0IN AN EXCEEDINGLY\u00a0STATE\/UT\">TURNOVER\u00a0IN AN EXCEEDINGLY\u00a0STATE\/UT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#RECIPIENT_OF_CREDIT\" title=\"RECIPIENT OF CREDIT\">RECIPIENT OF CREDIT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#TURNOVER\" title=\"TURNOVER\">TURNOVER<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#PROCEDURE_FOR_DISTRIBUTION\" title=\"PROCEDURE FOR DISTRIBUTION\">PROCEDURE FOR DISTRIBUTION<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#Formula\" title=\"Formula :\u00a0\">Formula :\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#MANNER_OF_RECOVERY\" title=\"MANNER OF RECOVERY\">MANNER OF RECOVERY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#RECOVERY_PROCEDURE_FOR_WRONG_DISTRIBUTION\" title=\"RECOVERY PROCEDURE FOR WRONG DISTRIBUTION \">RECOVERY PROCEDURE FOR WRONG DISTRIBUTION <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#MANNER_OF_DISTRIBUTION_OF_ITC_BY_ISD\" title=\"MANNER OF DISTRIBUTION OF ITC BY ISD\">MANNER OF DISTRIBUTION OF ITC BY ISD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#AMOUNT_OF_DISTRIBUTION_OF_ITC_BY_INPUT_TAX_DISTRIBUTOR_ISD\" title=\"AMOUNT OF DISTRIBUTION OF ITC BY INPUT TAX DISTRIBUTOR (ISD)\">AMOUNT OF DISTRIBUTION OF ITC BY INPUT TAX DISTRIBUTOR (ISD)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#SOME_EXAMPLES_OF_INPUT_TAX_DISTRIBUTOR_ISD_WORKING\" title=\"SOME EXAMPLES OF INPUT TAX DISTRIBUTOR (ISD) WORKING \">SOME EXAMPLES OF INPUT TAX DISTRIBUTOR (ISD) WORKING <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/carajput.com\/blog\/itc-rules-for-input-service-distributor\/#FILLING_OF_RETURNS\" title=\"FILLING OF RETURNS\">FILLING OF RETURNS<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Input-Service-Distributor-ISD...jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-12978\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Input-Service-Distributor-ISD...jpg\" alt=\"Input-Service-Distributor-ISD\" width=\"980\" height=\"515\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Input-Service-Distributor-ISD...jpg 656w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Input-Service-Distributor-ISD..-300x157.jpg 300w\" sizes=\"(max-width: 980px) 100vw, 980px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"ITC_Rules_for_Input_Service_Distributor\"><\/span><span style=\"color: #ff0000;\">ITC Rules for Input Service Distributor<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"BRIEF_INTRODUCTION\"><\/span><span style=\"color: #000080;\"><strong>BRIEF INTRODUCTION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>An Input Service Distributor (ISD), under the <a href=\"https:\/\/carajput.com\/blog\/gst\/\">GST<\/a>: An ISD, or input service producer, is a kind of taxpayer under the GST that has the need to split input tax credits, GST related to GSTIN, into your divisions or branches, with different GSTINS, but which will be registered in the same and YOU.<\/p>\n<p>As described in Chapter 2 (61) of the CGST Act 2017, an Input Service Distributor means \u2013<\/p>\n<ol>\n<li>It must be the office of a supplier of goods and\/or services<\/li>\n<li>In the above-mentioned company, receiving tax receipts for receiving input services<\/li>\n<li>The aforementioned company, distributes CGST\/SGST\/IGST\/UTGST credit to a supplier of goods and\/or services, having the same PAN.<\/li>\n<li>The above office, provides for tax invoices or other documents, as required for distribution of credit.<\/li>\n<\/ol>\n<p><a href=\"https:\/\/www.caindelhiindia.com\/blog\/corporate-and-professional-update-april-30-2016\/\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-12976\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/INPUT-TAX-DISTRIBUTOR-ISD.png\" alt=\"INPUT TAX DISTRIBUTOR (ISD)\" width=\"970\" height=\"655\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/INPUT-TAX-DISTRIBUTOR-ISD.png 595w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/INPUT-TAX-DISTRIBUTOR-ISD-300x203.png 300w\" sizes=\"(max-width: 970px) 100vw, 970px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"MEANING_UNDER_GST_ACT\"><\/span><span style=\"color: #000080;\"><strong>MEANING UNDER GST ACT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The concept of ISD under the GST was inherited from the service taxation regime. This is the unit that should be used for tax invoices in the direction of receiving input services and further distributing the CGST, SGST\/UTGST, or IGST credit in the system of supplier units (using the same PAN) on pro-rata basis.<\/li>\n<li>CGST rules of 2017 define the procedure and conditions that must be met by the ISD, the quantum and manner of the Input Tax Credit (ITC) to be distributed by the Input Service Distributor, the customer&#8217;s invoice to be issued, the return must be filed by the ISD, as well as how to deal debit and credit notes issued by the ISD.<\/li>\n<li>As a distributor of goods and \/or services they may have various corporate offices, including the headquarters, regional office, marketing, warehouse, sales office, etc., these departments avail various inputs such as security, communication costs, courier fees, cleaning fees, etc.<\/li>\n<li>With such units and buildings to obtain registration as a Distributor of Input services in order to receive credit on such input service and the allocation of credit to other units would lead to effective use of the funds collected.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"MANNER_OF_DISTRIBUTION\"><\/span><span style=\"color: #000080;\"><strong>MANNER OF DISTRIBUTION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In accordance with Article 20 (1), CGST Act 2017 The Distributor of input grants distributes the credit tax as central or integrated tax and integrated taxes as an integrated tax by issuing a document containing the amount of the input tax credit distributed in such a way as may be provided.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"CONDITIONS\"><\/span><span style=\"color: #000080;\"><strong>CONDITIONS<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Tax paid for services used in the course of business activity of the said entities, be distributed among them through the ISD.<\/li>\n<li>ITC that is available in a month must be distributed in the same month. Thus, the suspension of distribution payments is not allowed. It is important for the ISD, not to distribute any excess amount to any entity.<\/li>\n<li>ISD shall not accept any invoices in which tax is paid under the reverse charge mechanism. It should be noted that it is the recipient of the service who is subject, under the reverse charge mechanism, to discharge the liability of tax, and can claim the ITC.<\/li>\n<\/ol>\n<p><span style=\"color: #000080;\"><strong>This means that if they want to take input service under RCM, the entity shall be registered under GST.<\/strong><\/span><\/p>\n<ul>\n<li>The credit of CGST, SGST\/UTGST, or IGST should be distributed separately and consideration is given to eligible and ineligible credit.<\/li>\n<li>Credit attributable to a particular recipient unit shall be distributed to such entity, even though the same is unregistered or is making exempt supplies.<\/li>\n<li>The entity is required to take a separate registration as ISD even though the said entity is registered as a normal taxpayer in REG-01.<\/li>\n<li>Also, a company can have different registration for different places of businesses as ISD<\/li>\n<li>ISD shall issue an invoice regarded as an ISD invoice to the units to whom the ITC is distributed.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"DISTRIBUTION_OF_CREDIT\"><\/span><span style=\"color: #000080;\"><strong>DISTRIBUTION OF CREDIT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The taxes be distributed in the form SGST and IGST, and the same be provided under a document containing the amount of input tax credit to be distributed \u2013<\/p>\n<ol>\n<li><span style=\"color: #000080;\"><strong>ISD AND RECIPIENT IN THE SAME STATE &#8211; <\/strong><\/span><\/li>\n<\/ol>\n<table style=\"height: 132px;\" width=\"895\">\n<tbody>\n<tr>\n<td width=\"342\"><strong>TYPE OF CREDIT<\/strong><\/td>\n<td width=\"346\"><strong>CREDIT DISTRIBUTED<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"342\"><strong>CGST<\/strong><\/td>\n<td width=\"346\"><strong>CGST<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"342\"><strong>IGST<\/strong><\/td>\n<td width=\"346\"><strong>CGST OR SGST<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"342\"><strong>SGST<\/strong><\/td>\n<td width=\"346\"><strong>SGST<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ol start=\"2\">\n<li><span style=\"color: #000080;\"><strong>ISD AND RECIPIENT IN DIFFERENT STATE \u2013 <\/strong><\/span><\/li>\n<\/ol>\n<table style=\"height: 265px;\" width=\"895\">\n<tbody>\n<tr>\n<td width=\"340\"><strong>TYPE OF CREDIT<\/strong><\/td>\n<td width=\"343\"><strong>CREDIT DISTRIBUTED<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"340\"><strong>CGST<\/strong><\/td>\n<td width=\"343\"><strong>CGST OR IGST<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"340\"><strong>IGST<\/strong><\/td>\n<td width=\"343\"><strong>IGST OR CGST<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"340\"><strong>SGST<\/strong><\/td>\n<td width=\"343\"><strong>SGST OR IGST<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/ISD-.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-12977\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/ISD-.png\" alt=\"ISD\" width=\"827\" height=\"592\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/ISD-.png 710w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/ISD--300x215.png 300w\" sizes=\"(max-width: 827px) 100vw, 827px\" \/><\/a><\/p>\n<p><span style=\"color: #000080;\"><strong>EXAMPLE:<\/strong><\/span><\/p>\n<ul>\n<li>Suppose ISD is situated in Kolkata and receives an Invoice in respect of an intra state supply of input service on payment of CGST and SGST and such services were shared among another entity registered in Delhi. Thus, the CGST credit will be distributed to all the units of the ISD and such credit can also be used as CGST.<\/li>\n<li>However, in case of SGST credit the same can be utilized by the entity registered in Kolkata. Hence, such SGST can be used as IGST by the entities registered in states other than Kolkata.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"RECEIPT_OF_CREDIT\"><\/span><span style=\"color: #000080;\"><strong>RECEIPT OF CREDIT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>As per section 16 of the CGST\/SGST Act,2017, the credit is going to be available to the taxable person in an electronic credit ledger maintained within the common portal. everybody making outward supply of products or services is required to declare the main points of outward supply by the 10th of the following month.<\/li>\n<li>Registered number of recipients is additionally declared by the supplier making outward supply. The credit gets auto-populated within the accounts of the recipient supported such declaration by person making outward supply.<\/li>\n<li>The recipient is eligible to take up multiple registrations under GST Law, which can be in the form of State-wise registration and ISD registration. The recipient should carefully specify the ISD registration number so as to avail of the credit.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CONDITIONS_FOR_DISTRIBUTION\"><\/span><span style=\"color: #000080;\"><strong>CONDITIONS FOR DISTRIBUTION <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As per Sec.20(2) of the CGST Act,2017 specifies condition subject to which credit\u00a0will be\u00a0distributed by Input Service Distributor. These are: &#8211;<\/p>\n<ol>\n<li>The credit\u00a0is often\u00a0distributed to the recipients of credit against a document containing such details as\u00a0is also\u00a0prescribed.<\/li>\n<li>Quantity of the credit distributed shall not exceed the quantity of credit available for<\/li>\n<li>The credit of tax paid on input services\u00a0owing to\u00a0a recipient of credit shall be distributed only\u00a0to it\u00a0recipient.<\/li>\n<\/ol>\n<h4 style=\"padding-left: 80px;\"><span class=\"ez-toc-section\" id=\"EXAMPLE\"><\/span><span style=\"color: #000080;\"><strong>EXAMPLE<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p style=\"padding-left: 80px;\">ABC Limited has its corporate office in Mumbai and three manufacturing facilities in Jharkhand, Maharashtra, and West Bengal. Its Corporate Office is registered as an Input Service Distributor (ISD) under GST Law, 2017.<\/p>\n<p style=\"padding-left: 80px;\">On the direction of ABC Limited, the Audit Committee it&#8217;s Corporate Office has appointed an audit firm to hold out the Management Audit of its plant in Jharkhand. during this case, because the service is exclusively for its unit in Jharkhand, the credit is distributed to the Jharkhand unit only and not Maharashtra or province unit.<\/p>\n<ol start=\"4\">\n<li>The credit of tax paid on input services attributed to\u00a0over\u00a0one recipient of credit shall be distributed amongst such recipients to whom the input service is attributable and such distribution shall be\u00a0proportionately\u00a0on\u00a0the idea\u00a0of the turnover\u00a0in an exceedingly\u00a0State or turnover\u00a0in an exceedingly\u00a0Union territory of such recipient, during the relevant period, to\u00a0the combination\u00a0of the turnover of all such recipients to whom such input service is attributable and which are operational\u00a0within the\u00a0current year, during the said relevant period.<\/li>\n<\/ol>\n<h4 style=\"padding-left: 80px;\"><span class=\"ez-toc-section\" id=\"EXAMPLE-2\"><\/span><span style=\"color: #000080;\"><strong>EXAMPLE<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p style=\"padding-left: 80px;\">A Ld. has its corporate office in Mumbai and three manufacturing facilities in Jharkhand, Maharashtra and state. Its corporate office is registered as an Input Service Distributor (ISD). Turnover of the three units in its states for the last year and current year (Quarter-1 and Quarter -2) is as follows:<\/p>\n<table style=\"height: 304px;\" width=\"1030\">\n<tbody>\n<tr>\n<td width=\"169\"><strong>UNIT<\/strong><\/td>\n<td width=\"163\"><strong>FINANCIAL YEAR 2019-20 (RS CRORES)<\/strong><\/td>\n<td width=\"160\"><strong>Q-1 F.Y 2019-20 (RS CRORES)<\/strong><\/td>\n<td width=\"160\"><strong>Q-2 F.Y.2019-20 (RS CRORES)<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"169\"><strong>JHARKHAND<\/strong><\/td>\n<td width=\"163\"><strong>400<\/strong><\/td>\n<td width=\"160\"><strong>60<\/strong><\/td>\n<td width=\"160\"><strong>80<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"169\"><strong>MAHARASHTRA<\/strong><\/td>\n<td width=\"163\"><strong>300<\/strong><\/td>\n<td style=\"text-align: left;\" width=\"160\"><strong>50<\/strong><\/td>\n<td width=\"160\"><strong>25<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"169\"><strong>WEST BENGAL<\/strong><\/td>\n<td width=\"163\"><strong>500<\/strong><\/td>\n<td width=\"160\"><strong>75<\/strong><\/td>\n<td width=\"160\"><strong>75<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"padding-left: 80px;\">Input Service Distributor (ISD) has obtained certain services for its units in Jharkhand ad province on which CGST and SGST of Rs.20 Lakhs were paid. ISD wanted to distribute the credit within the month of July 2019 (Financial Year 2019-20). The credit is distributed as under: &#8211;<\/p>\n<p style=\"padding-left: 160px;\">Jharkhand =Rs.20 Lakhs \u00d7 (400crores\/ (Rs.400 crores. +Rs.500 crores.) =Rs.8.89 Lakhs<\/p>\n<p style=\"padding-left: 160px;\">West Bengal =Rs.20 Lakhs \u00d7 (500crores\/ (400crores+Rs.500 crores) = Rs.11.11 lakhs<\/p>\n<p style=\"padding-left: 160px;\">Maharashtra = Nil (because the services were just for Jharkhand and state)<\/p>\n<ol start=\"5\">\n<li>The credit of tax paid on input services\u00a0thanks to\u00a0all recipients of credit shall be distributed amongst such recipients and such distribution shall be\u00a0proportionately\u00a0on\u00a0the idea\u00a0of the Turnover\u00a0in a very\u00a0State or turnover\u00a0in a very\u00a0Union Territory of such recipient, during the relevant period, to\u00a0the mixture\u00a0of the turnover of all recipients and which are operational\u00a0within the\u00a0current year, during the said relevant period.<\/li>\n<\/ol>\n<h4 style=\"padding-left: 80px;\"><span class=\"ez-toc-section\" id=\"EXAMPLE-3\"><\/span><span style=\"color: #000080;\"><strong>EXAMPLE<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p style=\"padding-left: 80px;\">XYZ Limited has its corporate office in Mumbai and three manufacturing facilities in Jharkhand, Maharashtra and state. The company\u2019s Corporate Office is registered as an Input Service Distributor. Turnover of the three units in its states for the last year and current year (Q-1 and Q-2) are as follows.<\/p>\n<table style=\"height: 177px; margin-left: 80px;\" width=\"970\">\n<tbody style=\"padding-left: 80px;\">\n<tr style=\"padding-left: 80px;\">\n<td style=\"padding-left: 80px;\" width=\"173\"><span style=\"color: #000080;\"><strong>UNIT<\/strong><\/span><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><span style=\"color: #000080;\"><strong>FINANCIAL YEAR 2019-20 (RS IN CRORES)<\/strong><\/span><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><span style=\"color: #000080;\"><strong>Q-1 F.Y.2019-20 (RS IN CRORES)<\/strong><\/span><\/td>\n<td style=\"padding-left: 80px;\" width=\"169\"><span style=\"color: #000080;\"><strong>Q-2. F. Y 2019-20 (RS IN CRORES)<\/strong><\/span><\/td>\n<\/tr>\n<tr style=\"padding-left: 80px;\">\n<td style=\"padding-left: 80px;\" width=\"173\"><strong>JHARKHAND<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><strong>400<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><strong>60<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"169\"><strong>80<\/strong><\/td>\n<\/tr>\n<tr style=\"padding-left: 80px;\">\n<td style=\"padding-left: 80px;\" width=\"173\"><strong>MAHARASHTRA<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><strong>NIL<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><strong>50<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"169\"><strong>25<\/strong><\/td>\n<\/tr>\n<tr style=\"padding-left: 80px;\">\n<td style=\"padding-left: 80px;\" width=\"173\"><strong>WEST BENGAL<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><strong>500<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"171\"><strong>75<\/strong><\/td>\n<td style=\"padding-left: 80px;\" width=\"169\"><strong>75<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"padding-left: 80px;\">ISD is in receipt of services that is commonly shared by all its units on which IGST of Rs.40 lakhs was paid.<\/p>\n<p style=\"padding-left: 80px;\">ISD wanted to distribute the credit\u00a0within the\u00a0month of Juy,2019 (Financial Year 2019-20). The credit\u00a0is going to be\u00a0distributed as under: &#8211;<\/p>\n<p style=\"padding-left: 80px;\">Jharkhand = Rs.40 lakhs \u00d7 (Rs.60 crores \/ (Rs.60 crores+ Rs.50 crores.) = Rs.12.97 Lakhs<\/p>\n<p style=\"padding-left: 80px;\">West Bengal= Rs. 40 Lakhs \u00d7 (Rs.50 crores\/ (Rs.60crores + 50 crores +75 crores) = 10.81 lakhs<\/p>\n<p style=\"padding-left: 80px;\">Maharashtra= Rs. 40 Lakhs\u00d7 (Rs.75 crores\/ (Rs.60 crores+Rs.50crores+Rs.75 crores) = 16.22. lakhs.<\/p>\n<p style=\"padding-left: 80px;\">Bottom of Form<\/p>\n<h3><span class=\"ez-toc-section\" id=\"WHAT_IS_MEANING_OF_RELEVANT_PERIOD\"><\/span><span style=\"color: #000080;\"><strong>WHAT IS MEANING OF RELEVANT PERIOD ?\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Meaning of \u201cRelevant Period\u201d as per Explanation -1:<\/p>\n<p style=\"padding-left: 40px;\">The Relevant Period\u201d shall be: &#8211;<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>If the recipients of the credit have turnover\u00a0within their State or Union territory in the\u00a0fiscal year\u00a0preceding the year during which credit is to be distributed, the said\u00a0twelvemonth, or<\/li>\n<li>In case some or all recipients of the credit don&#8217;t have any turnover within their State or Union Territory in the year preceding the year during which the credit is to be distributed, the half-moon that details of such turnover of all the recipients are available, previous to the month during which credit is to be distributed.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"TURNOVER_IN_AN_EXCEEDINGLY_STATEUT\"><\/span><span style=\"color: #000080;\"><strong>TURNOVER\u00a0IN AN EXCEEDINGLY\u00a0STATE\/UT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Meaning of Turnover in a very State or Turnover in an exceedingly Union Territory as per Section 2(112) of CGST Act,2017:<\/p>\n<p>\u201c Turnover in State\u201d or Turnover in Union territory \u201c means the combined value of all taxable supplies (excluding the worth of inward supplies on which tax is payable by an individual on reverse charge basis) and exempt supplies made within a State or Union Territory by a taxable person, exports of products or services or both and inter-State supplies of products\/services or both made by the said taxable person but excludes central tax, State-Tax, Union territory tax, Integrated tax, and cess.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"RECIPIENT_OF_CREDIT\"><\/span><span style=\"color: #000080;\"><strong>RECIPIENT OF CREDIT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The expression \u201crecipient of credit \u201cmeans the supplier of products or services or both having the identical PAN as that of the Input Service Distributor.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"TURNOVER\"><\/span><span style=\"color: #000080;\"><strong>TURNOVER<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The term \u201cturnover\u201d, in\u00a0relevancy\u00a0any registered person engaged\u00a0within the\u00a0supply of taxable goods\u00a0likewise\u00a0as goods not taxable under this Act, means\u00a0the worth\u00a0of turnover, reduced by\u00a0the quantity\u00a0of any duty or tax levied under entry 84 of List I of the Seventh Schedule to the Constitution and entry 51 and 54 of List II of the said schedule.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"PROCEDURE_FOR_DISTRIBUTION\"><\/span><span style=\"color: #000080;\"><strong>PROCEDURE FOR DISTRIBUTION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As per Rule 39 of CGST Rules,2017 these following procedure we&#8217;ve to follow:<\/p>\n<ol>\n<li>An Input Service Distributor shall distribute input\u00a0step-down\u00a0within the\u00a0manner and subject to the conditions, namely: &#8211;<\/li>\n<\/ol>\n<ul>\n<li>The input\u00a0diminution\u00a0available for distribution\u00a0in a very\u00a0month shall be distributed\u00a0within the\u00a0same month\u00a0and therefore the\u00a0details thereof shall be furnished in FORM GSTR-6 in accordance with the provisions of Chapter VIII\u00a0of those\u00a0rules.<\/li>\n<li>Input Service Distributor shall, in accordance with the provisions of clause (d), separately distribute the number ineligible as input reduction (ineligible under the provisions of sub-section (5) of section 17 or otherwise) and therefore the amount eligible as input step-down.<\/li>\n<li>The Input decrease on account of central tax, State tax, Union territory tax, and integrated tax shall be distributed separately in accordance with the provisions of clause (d).<\/li>\n<li>Input reduction that&#8217;s required to be distributed in accordance with the provisions of clause (d) and \u20ac of sub-section (2) of section 20 to at least one of the recipients\u201d R1\u201d, whether registered or not, from amongst the entire of all the recipients to whom input decrease is attributable, including the recipient(s) who are engaged in making exempt supply, or not registered for any other reason, shall be the termed as quantity,\u201d C1\u201d, and be calculated by applying the subsequent formula: &#8211;<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Formula\"><\/span><span style=\"color: #000080;\"><strong>Formula :\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>C1=(t1\u00f7T) \u00d7C, where, \u201cC\u201d is that the amount of credit to be distributed,<br \/>\n\u201dt1\u201d\u00a0is that the\u00a0turnover, as\u00a0mentioned\u00a0in section 20, of person R1 during the relevant period, and<br \/>\n\u201cT\u201d\u00a0refers to the\u00a0aggregate turnover of all the recipient entities, to whom such input service is attributable in accordance with the provisions of section 20.<\/p>\n<ul>\n<li>The input\u00a0decrease\u00a0on account of integrated tax shall be distributed as input\u00a0diminution\u00a0of tax\u00a0to each\u00a0recipient.<\/li>\n<li>ITC on account of central tax and state tax or any other tax leviable in union territory shall \u2013<\/li>\n<li>In respect of a recipient located\u00a0within the\u00a0same State or Union territory\u00a0within which\u00a0the Input Service Distributor\u00a0is found, be distributed as input\u00a0decrease\u00a0of central tax and State tax or Union Territory Tax respectively.<\/li>\n<li>In respect of a recipient located\u00a0in a very\u00a0State or Union territory\u00a0aside from\u00a0that of the Input Service Distributor, be distributed as integrated tax\u00a0and therefore the\u00a0amount to be so distributed shall be\u00a0adequate to\u00a0the mixture\u00a0of\u00a0the quantity\u00a0of input\u00a0step-down\u00a0of central tax and State tax or Union territory tax that qualifies for being distributed as ITC, to the eligible recipient as per the clause (d).<\/li>\n<li>The Input Tax Distributor shall issue an ISD invoice, as prescribed in sub rule (1) of rule 54 clearly indicating in such invoice that\u00a0it&#8217;s\u00a0issued\u00a0just for\u00a0distribution of input\u00a0step-down.<\/li>\n<li>Input Service Distributor shall issue an ISD credit note, as prescribed in sub-rule (1) of rule 54, for reduction of credit just in case the input decrease already distributed gets reduced for any reason.<\/li>\n<li>Additional amount of input step-down on account of issuance of a debit note to an Input Service Distributor by the supplier shall be distributed within the manner and subject to the conditions per clauses (a) to (f)and the number owing to any recipient shall be calculated within the manner provided I clause (d) above and such credit shall be distributed within the moth within which the debit note has been including within the return in FORM GSTR-6.<\/li>\n<li>Any input step-down required to be reduced on account of issuance of a credit note to the Input Service Distributor by the supplier shall be apportioned to every recipient within the same ratio within which input diminution contained within the original invoice was distributed in terms of clause (d) above, and also the amount so apportioned shall be: &#8211;<\/li>\n<li>Reduced from\u00a0the quantity\u00a0to be distributed\u00a0within the\u00a0month\u00a0within which\u00a0the credit note is included\u00a0within the\u00a0return in FORM GSTR-6.<\/li>\n<li>Added to the output\u00a0liabilities\u00a0of the recipient and where\u00a0the quantity\u00a0so apportioned is\u00a0within the\u00a0negative by virtue of\u00a0the number\u00a0of credits under distribution being\u00a0but\u00a0the quantity\u00a0to be adjusted.<\/li>\n<li>If\u00a0the number\u00a0of input\u00a0diminution\u00a0distributed by an Input Service Distributor is reduced\u00a0afterward\u00a0for\u00a0the other\u00a0reason for any of the recipients, including that\u00a0it absolutely was\u00a0distributed to a wrong recipient by the Input Service Distributor,\u00a0the method\u00a0prescribed in clause (j) of sub-rule (1) shall, mutatis mutandis applies for reduction of credit.<\/li>\n<li>Subject to sub-rue (2), the Input Service Distributor shall, on\u00a0the premise\u00a0of the ISD credit note\u00a0laid out in\u00a0clause (h) of sub-rule (1), issue an ISD Invoice to the recipient entitled to such credit and include the ISD credit note\u00a0and also the\u00a0ISD Invoice\u00a0within the\u00a0return in FORM GSTR-6 for the month\u00a0during which\u00a0such credit notes and invoice was issued.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"MANNER_OF_RECOVERY\"><\/span><span style=\"color: #000080;\"><strong>MANNER OF RECOVERY<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As per sec.21 of the CGST Act,2017, Where the Input Service Distributor distributes the credit in contravention of the provisions contained in section 20 leading to excess distribution of credit to 1 or more recipients of credit, the surplus credit so distributed shall be recovered from such recipients together with interest, and therefore the provisions of section 73 or section 74 shall apply, \u00a0since the same is mutatis mutandis, and applies for determination of the amount to be recovered.<\/p>\n<p><span style=\"color: #000080;\"><strong>EXAMPLE<\/strong><\/span><\/p>\n<p>If ABC company has one unit in Rajasthan and another unit in the province and as per the provisions contained in Section 21, Rs.1 Lakh was to be distributed to the unit in Rajasthan and Rs.2 Lakhs to the unit in the state. However, because of some calculation error credit of Rs.1.2 Lakh was issued to the Rajasthan unit and Rs.1.8 lakh to the unit in West Bengal. Thus, excess credit of Rs.20,000\/- issued to the unit in Rajasthan shall be recovered from the unit in Rajasthan, and show cause notice shall be issued by the jurisdictional officer of Rajasthan<\/p>\n<h3><span class=\"ez-toc-section\" id=\"RECOVERY_PROCEDURE_FOR_WRONG_DISTRIBUTION\"><\/span><span style=\"color: #000080;\"><strong>RECOVERY PROCEDURE FOR WRONG DISTRIBUTION <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>GST Act provides that\u00a0the subsequent\u00a0shall be deemed to be an inappropriate distribution of\u00a0reduction\u00a0by Input Service Distributor:<\/p>\n<ol>\n<li>Credit distributed\u00a0to any or all\u00a0or any recipient in\u00a0far more than\u00a0the quantity\u00a0available for distribution.<\/li>\n<li>Distributed in an inappropriate ratio\u00a0to all or any\u00a0or any recipient.<\/li>\n<li>The Distributed in excess to what a supplier is entitled to and shall be recovered from such recipient(s) together with interest and therefore the provisions of \u2018Demand and Recovery\u2019 shall apply for effecting such recovery.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"MANNER_OF_DISTRIBUTION_OF_ITC_BY_ISD\"><\/span><span style=\"color: #000080;\"><strong>MANNER OF DISTRIBUTION OF ITC BY ISD<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>ITC accumulated\u00a0can be\u00a0of two sorts:<\/p>\n<ol>\n<li><span style=\"color: #000080;\"><strong>ELIGIBLE:<\/strong><\/span> that which may be utilized for setting off against output liabilities<\/li>\n<li><span style=\"color: #000080;\"><strong>INELIGIBLE<\/strong>:<\/span> that which cannot be utilized for setting off against output liabilities<\/li>\n<\/ol>\n<p>Note: To read more on the distribution of ITC by ISD. Both the types have to be distributed in the same manner. Input Tax Credit on any goods or services or both utilized by the taxable person for the development of immovable property (other than machinery or plant) on his own account including any goods or services or both employed in the course or expansion of business has got to be distributed separately for the ineligible ITC and eligible ITC.<\/p>\n<p>ITC on account of IGST\u00a0must\u00a0be distributed as IGST only ITC of CGST and SGST\/UTGST in respect of recipient located\u00a0within the\u00a0same State\/Union territory is distributed\u00a0because it\u00a0is respectively. ITC of CGST, SGST\/UTGST in respect of recipient located\u00a0in several\u00a0states is to be distributed as IGST i.e., CGST+SGST\/UTGST=IGST<\/p>\n<h3><span class=\"ez-toc-section\" id=\"AMOUNT_OF_DISTRIBUTION_OF_ITC_BY_INPUT_TAX_DISTRIBUTOR_ISD\"><\/span><span style=\"color: #000080;\"><strong>AMOUNT OF DISTRIBUTION OF ITC BY <\/strong><strong>INPUT TAX DISTRIBUTOR (ISD)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For instance, some services\u00a0are\u00a0billed on Head office but\u00a0employed by\u00a0its units. There are three scenarios:<\/p>\n<p><span style=\"color: #000080;\"><strong>SCENARIO 1<\/strong><\/span><\/p>\n<p>Service billed\u00a0is employed\u00a0entirely by one recipient unit: Here, the services are used only by\u00a0one among\u00a0its units and none other. So, ITC of such bills that are specifically\u00a0thanks to\u00a0one unit must be allocated\u00a0thereto\u00a0unit entirely.<\/p>\n<p><span style=\"color: #000080;\"><strong>SCENARIO 2<\/strong><\/span><\/p>\n<p>Service billed\u00a0is employed\u00a0by\u00a0over\u00a0one recipient unit but not all Here, the services are\u00a0utilized by\u00a0two or more units but not all. Credit\u00a0needs to\u00a0be distributed to those units that were operational and generated revenue during the relevant month.<\/p>\n<p>Tax credit shall be distributed as follows: Total credit of tax is apportioned on a pro-rata basis\u00a0supported\u00a0the turnover of the recipient\u00a0within the\u00a0state\/ union territory to\u00a0the full\u00a0turnover of all the recipients that are operational and to whom the input service relates.<\/p>\n<p><span style=\"color: #000080;\"><strong>Formula<\/strong><\/span><\/p>\n<p>C1 = C*(T1\/T)<\/p>\n<p>C1 =ITC to be distributed to the recipient<\/p>\n<p>C =Total ITC available for distribution<\/p>\n<p>T1 =Turnover of\u00a0the particular\u00a0recipient<\/p>\n<p>T =Total Turnover of all recipients to which ITC relates<\/p>\n<p><span style=\"color: #000080;\"><strong>SCENARIO 3<\/strong><\/span><\/p>\n<ul>\n<li>Service billed\u00a0is employed\u00a0by all the recipient units: Here, the services are\u00a0employed by\u00a0all the units. Credit\u00a0should\u00a0be distributed to those units that were operational and generated revenue during the relevant month.<\/li>\n<li>Tax credit shall be distributed as follows: Total credit of tax is apportioned on a pro-rata basis supported by the turnover of the recipient within the state\/ union territory to the full turnover of all the recipients that are operational and to whom the input service is relates.<\/li>\n<li>The proportion of ITC shall be determined, in respect of procedures laid down in scenario 2.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>KEY POINTS TO CONSIDER\u00a0<\/strong><\/span><\/p>\n<ul>\n<li>Suppose there is quite one location in a very state or union territory, the sum of their turnover therein state\/ union territory is to be considered in situ of turnover of the recipient (within the numerator).<\/li>\n<li>Credit owing to a recipient has distributed whether or not such recipient is unregistered or making exempt supplies.<\/li>\n<li>Where both taxable and non-taxable supplies are made, the \u201cturnover\u201d shall exclude Central excise duty, State excise duty, and VAT.<\/li>\n<li>If there are two or more locations of a recipient\u00a0in a very\u00a0state\/ Union Territory, the sum of their turnover is to be considered in\u00a0understanding\u00a0the proportion of the credit\u00a0that may\u00a0be distributed\u00a0thereto\u00a0registration.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"SOME_EXAMPLES_OF_INPUT_TAX_DISTRIBUTOR_ISD_WORKING\"><\/span><span style=\"color: #000080;\"><strong>SOME EXAMPLES OF <\/strong><strong>INPUT TAX DISTRIBUTOR (ISD) <\/strong><strong>WORKING <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>EXAMPLE 1<\/strong><\/span><\/p>\n<p>XYZ Ltd. has its head office located in Mumbai (Maharashtra) which could be a registered ISD. it&#8217;s four units in numerous cities: one in Bangalore (Karnataka), one in Delhi, one in Chennai, and one in Pune (Maharashtra)Bangalore unit operates from another location in Karnataka at Belgaum. Delhi unit wasn&#8217;t operational during the year. Turnover generated at different locations is as follows:<\/p>\n<ul>\n<li>Bangalore: Rs. 50,00,000<\/li>\n<li>Belgaum: Rs. 30,00,000<\/li>\n<li>Pune: Rs. 80,00,000<\/li>\n<li>Chennai: Rs. 40,00,000<\/li>\n<\/ul>\n<p>Total turnover for the year is Rs. 200,00,000. We&#8217;ve got\u00a0three situations \u2013<\/p>\n<ul>\n<li>XYZ Ltd. Is in receipt of an invoice issued by the supplier \u2018A\u2019 involving an Input tax credit-IGST of Rs. 1,80,000 for December 2017, services\u00a0employed by\u00a0all units.<\/li>\n<li>Also, XYZ Ltd received an invoice from supplier \u2018B\u2019 with an input\u00a0reduction\u00a0-CGST and SGST Rs. 10,000 each\u00a0that&#8217;s\u00a0used entirely by the Pune unit.<\/li>\n<li>Also, XYZ Ltd received an invoice from supplier \u2018C\u2019 with an input\u00a0step-down<\/li>\n<\/ul>\n<p>CGST and SGST both amounting to Rs. 2,40,000 that&#8217;s used entirely by all units except the Chennai unit. The distribution of step-down is as follows \u2013<\/p>\n<ul>\n<li>The Head office of XYZ Ltd., is required to distribute the amount of Rs. 1,80,000 among all units except Delhi\u00a0because it\u00a0isn&#8217;t\u00a0operational\u00a0within the\u00a0ratio in 2:1:2 as follows \u2013<\/li>\n<li>Pune:\u00a0within the\u00a0kind of\u00a0IGST Rs. 72,000 i.e. (1,80,000\/200,00,000) x 80,00,000<\/li>\n<li>Chennai:\u00a0within the\u00a0type of\u00a0IGST Rs. 36,000 i.e. (1,80,000\/200,00,000) x 40,00,000<\/li>\n<li>Bangalore:\u00a0within the\u00a0sort of\u00a0IGST Rs. 72,000 i.e. (1,80,000\/200,00,000) x 80,00,000 .<\/li>\n<\/ul>\n<p>Being a ratio of turnover is \u2013 80,00,000: 40,00,000: 80,00,000 i.e., 2:1:2 Inclusive of the turnover at Belgaum because the turnover because it isn&#8217;t a separate unit but an extension of Bangalore unit within the identical state.<\/p>\n<p>XYZ Ltd Head office (ISD) shall distribute Rs. 10,000 to Pune only within the variety of CGST and SGST of Rs. 5,000 each because the supply from supplier \u2018B\u2019 was exclusively for Pune Unit.<\/p>\n<p>XYZ Ltd Head office (ISD) shall distribute Rs. 2,40,000 among all units except &#8211;<\/p>\n<ul>\n<li>Delhi\u00a0because it\u00a0isn&#8217;t\u00a0operational.<\/li>\n<li>Chennai as Input services isn&#8217;t employed by this unit.<\/li>\n<\/ul>\n<p>Thus, Pune will get CGST and SGST Rs. 60,000 each i.e. [(2,40,000\/160,00,000) x 80,00,000]\/2 Chennai: NIL Bangalore:\u00a0within the\u00a0type of\u00a0IGST Rs. 1,20,000 i.e. (2,40,000\/160,00,000) x 80,00,000 (*) (*) Inclusive of the turnover at Belgaum\u00a0because the\u00a0turnover\u00a0because it\u00a0isn&#8217;t\u00a0a separate unit but extension of Bangalore unit within\u00a0the identical\u00a0state.<\/p>\n<p><span style=\"color: #000080;\"><strong>EXAMPLE 2<\/strong><\/span><\/p>\n<p>XYZ Ltd. received a credit note from the supplier \u2018A\u2019 in January 2018 in respect of supplies made in December for ITC Rs 80,000\/-Now, this ITC mentioned in the credit note are going to be reduced from January month total ITC distributed, within the same ratio during which the initial ITC was distributed i.e., 2:1:2 (to be furnished partially 6B of the GSTR-6 of January 2018)<\/p>\n<ul>\n<li>Pune: in\u00a0variety of\u00a0IGST of Rs. 32,000<\/li>\n<li>Chennai: in\u00a0sort of\u00a0IGST of Rs. 16,000<\/li>\n<li>Bangalore: in\u00a0type of\u00a0IGST of Rs. 32,000<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>EXAMPLE 3<\/strong><\/span><\/p>\n<p>XYZ Ltd. received a credit note from the supplier \u2018C\u2019 in February 2018 in respect of supplies made in December for ITC Rs 50,000\/-Now, this ITC mentioned in debit note are added to January month total ITC distributed, within the same ratio within which the initial ITC was distributed i.e., 1:1 between Pune and Bangalore (to be furnished partly 6B of the GSTR-6 of February 2018)<br \/>\n\u2022 Pune: in\u00a0kind of\u00a0CGST and SGST of Rs. 12,500 each<\/p>\n<ul>\n<li>Chennai: NIL<\/li>\n<li>Bangalore: in\u00a0kind of\u00a0IGST of Rs. 25,000, Being ratio of turnover as \u2013 80,00,000: 80,00,000 (*) Inclusive of the turnover at Belgaum\u00a0because the\u00a0turnover\u00a0because it\u00a0isn&#8217;t\u00a0a separate unit but extension of Bangalore unit within\u00a0the identical\u00a0state<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"FILLING_OF_RETURNS\"><\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/is-self-certification-in-gstr-9c-really-a-positive-thing\/\" data-cke-saved-href=\"https:\/\/www.caindelhiindia.com\/blog\/is-self-certification-in-gstr-9c-really-a-positive-thing\/\"><strong>FILLING OF RETURNS<\/strong><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>According to section 34 (4) of the CGST Act,2017, states that each taxable person registered as an Input Service Distributor shall, forever time period or part thereof, furnish, in such form and in such manner as is also prescribed, a return, electronically, within thirteen days after the top of such month.<\/p>\n<p>Provision of Rue 65 of the GST Rules,2017 states that each input service distributor shall, on the premise of details contained in FORM GSTR-6A, and where required, after adding, correcting or deleting the main points, furnish electronically the return in FORM GSTR-6, containing the main points of tax invoices on which credit has been received and issued under section 20, on the common portal of GST.<\/p>\n<p>As per Rule 60(5) of the GST Rules,2017 states that\u00a0the small print\u00a0of invoices furnished by an Input Service Distributor in his return in FORM GSTR-6 under rule 65 shall be made available to the recipient of credit\u00a0partially\u00a0B of Form GSTR-2A electronically through the Common Portal\u00a0and therefore the\u00a0said recipient may include\u00a0the identical\u00a0in FORM GSTR-2.<\/p>\n<p><span style=\"color: #000080;\"><strong>RECENT UPDATES ON GSTR-6<\/strong><\/span><\/p>\n<ul>\n<li>28<sup>th<\/sup> May 2021 &#8211; The\u00a0due date\u00a0for filing of GSTR-6 for April\u00a0and the same has been extended up to 30th June 2021.<\/li>\n<li>1<sup>st<\/sup> May 2021: The\u00a0date\u00a0to furnish GSTR-6 for April 2021 has been extended up to 31st May 2021.<\/li>\n<li>3<sup>rd<\/sup> April 2020: CBIC has notified that the\u00a0maturity date\u00a0to furnish GSTR-6 for the months of March 2020, April 2020\u00a0and will\u00a02020 (falling due between 20th March 2020 to 29th June 2020) shall stand extended till 30th June 2020.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-20968\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/gstr-6..jpg\" alt=\"gstr-6.\" width=\"691\" height=\"721\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/gstr-6..jpg 858w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/gstr-6.-288x300.jpg 288w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/gstr-6.-768x801.jpg 768w, 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