Distribution Of Credit By Input Services Distributor (ISD) under GST

The ISD will distribute the credit using the document prescribed in this behalf.

•          the credit can be distributed to the recipients of credit against a document containing such details as may be prescribed;

•          the amount of the credit distributed shall not exceed the amount of credit available for distribution;

•          the credit of tax paid on input services attributable to a recipient of credit shall be distributed only to that recipient;

•          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 is attributable and such distribution shall be pro rata on the basis of the turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all such recipients to whom such input service is attributable and which are operational in the current year, during the said relevant period;

Further the rules for input tax credit also provide the manner of distribution of credit by an ISD

(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

(b)       the Input Service Distributor shall, in accordance with the provisions of clause (d), separately distribute the amount in-eligible as input tax credit under the provisions of sub-section (5) of section 17 and the amount eligible as input tax credit;

(c)        the input tax credit on account of Central tax, State tax, Union territory tax and integrated tax shall be distributed separately in accordance with the provisions of clause (ci);

(d)       the input tax credit that is required to be distributed in accordance with the provisions of clauses (ci) and (e) of sub-section (2) of section 20 to one of the recipients ‘R 1’, whether registered or not, from amongst the total of all the recipients to whom input tax credit is attributable, including the recipient(s) who are engaged in making exempt supply, or are otherwise not registered for any reason, shall be the amount, “C1”, to be calculated by applying the following formula:

C1 = (t1/T) X C

where, “C” is the amount of credit to be distributed, “t1” is the turnover, as referred to in section 20, of person Ri during the relevant period, and “T” is the aggregate of the turnover of all recipients to whom the input service is attributable in accordance with the provision of section 20 during the relevant period;

(e)        the input tax credit on account of integrated tax shall be distributed as input tax credit of integrated tax to every recipient;

(f)        the input tax credit on account of Central tax and State tax/UT tax shall, (z) in respect of a recipient located in the same State in which the Input Service Distributor is located, be distributed as input tax credit of Central tax and State tax/UT tax respectively; (ii) in respect of a recipient located in a State 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 that qualifies for distribution to such recipient in accordance with clause (ci);

(g)       The Input Service Distributor shall issue an ISD invoice, as prescribed in sub-rule (1) of rule invoice-7, clearly indicating in such invoice that it is issued only for distribution of input tax credit.

(h)       The Input Service Distributor shall issue an ISD credit note, as prescribed in sub-rule (1) of rule Invoice-7, for reduction of credit in case the input tax credit already distributed gets reduced for any reason.

(i)         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 conditions specified in clauses (a) to (f) and the amount attributable to any recipient shall be calculated in the manner provided in clause (ci) above and such credit shall be distributed in the month in which the debit note has been included in the return in Form GSTR-6.

(j)         Any input tax credit required to be reduced on account of issuance of a credit note to the Input Service Distributor by the supplier shall be apportioned to each recipient in the same ratio in which input tax credit contained in the original invoice was distributed in terms of clause (d) above, and the amount so apportioned shall be,

(i)         reduced from the amount to be distributed in the month in which the credit note is included in the return in Form GSTR-6; and

(ii)        added to the output tax liability of the recipient and where the amount so apportioned is in the negative by virtue of the amount of credit to be distributed is less than the amount to be adjusted.

If the amount of input tax credit distributed by an Input Service Distributor is reduced later on for any other reason for any of the recipients, including that it was distributed to a wrong recipient by the Input Service Distributor, the process prescribed in clause (j) of sub-rule (1) shall, mutatis mutandis apply for reduction of credit.

 
Related Topics ....
Conditions For Taking ITC ( Input Tax Credit) under GST
Limitations On Availing ITC (Input Tax Credit) under GST
Determination Of Input Tax Credit (ITC) In Respect Of Inputs Or Input Services ( Rule-7 of ITC Rules)
Determination Of Input Tax Credit (ITC) In Respect Of Capital Goods (Rule-7 of ITC Rules)
Restrictions On Availing ITC ( Input Tax Credit ) under GST
Utilizing Input Tax Credit (ITC) in respect of IGST, CGST, Cess and SGST/UTGST
Availability Of Input Tax Credit (ITC) In Certain Special Circumstances under GST
Transfer, Reversal Of Input Tax Credit (ITC) Under GST
Distribution Of Credit By Input Services Distributor (ISD) under GST
   
   
   
   
Tally.ERP9 Book Online Order Tally.ERP9 Book Content
 
 
GST (India)
F.A.Q. on GST
GST Forms Download
GST Compensation Law
GST Enrollment Process
GST Law & Act.
GST Rules
GST Schedule ( I to V )
IGST Law & Act.
GST A Practical Knowledgebase
Filing GST Return
Enroll & Registration with GST
GST Office Tool to File GST Return
LIBRARY @ Tax Management
TAX & INVESTMENT GUIDE FOR "NRI"- Non-Resident Indians !
GUIDE & FAQ @ TAX
GRAPHICAL PRESENTATION @ TAX
TIPS & TRICKS @ TAX
MANAGERIAL & FINANCIAL DECISIONS @ TAX
5 GOLDEN RULES OF TAX PLANNING
FAMILY TAX PLANNING
DEDUCTIONS FROM YOUR INCOME
EXEMPTED INCOMES
HUF - FORMATION, MANAGEMENT & TAX PLANNING
COMPUTATION OF GROSS TOAL INCOME
INCOME TAX @ GLANCE
MULTIPLE KNOWLEDGEBASE ON TAX
51 TIPS ON TAX PLANNING
APPEALS UNDER INCOME TAX
ASSESSMENTS
PENALTIES UNDER IT DEPATMENTS
TAX SAVING SCHEMES
TAX READY RECKONER
TAX RATES
PROSECUTIONS UNDER INCOME TAX DEPARTMENT
TAXATION SYSTEM IN INDIA
CHARITABLE & RELIGIOUS TRUST - TAXATION
PRESCRIBED FORMS WITH with Section / Rules
 
TAX @ KNOWLEDGE BASE !

Most Popular Links :

Clubing of Income Deduction U/s 80C
Allowances Us-17(3) Exemption-Salary
Tax Amendment-2015 Taxable Income
Clubing of Income Tax Deductions
HUF Deduction HUF Investment
Gift by HUF HUF Tax Planning Tips
Tax Saving Schemes Tax Planning Tips
Refund of Tax Fringe Benefit Tax-FBT
Return Filing Assessment / Scrutiny
Notice from I.T. Dept. Incomes Types @ TDS
Exemptions-Tax Returns “Summon” U/s 131
'Black Money' @ I.Tax Big Gifts To Be Taxed
'Appeals' under I.Tax Assessment @ I.Tax
Exempted Incomes Capital Gain
Business & Professions House Property
Salaries @ I.Tax Partnership Firm
'Penalty' under I.Tax Act. Tax Ready Reckoner
Charitable Trust Useful Links @ I.Tax
 
Tally.ERP9 Book Online Order Tally.ERP9 Book Content
 

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications