Q 1. What is Input Service Distributor (ISD)?

Ans. As per Section 2(56) of MGL, ISD means an office of the supplier of goods and / or services which receives tax invoices issued under section 23 towards receipt of input services and issues tax invoice or such other document as prescribed for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above. For the purpose of distributing the credit, ISD is deemed as supplier of services.

Q 2. What are the requirements for registration as ISD?

Ans. An ISD is required to obtain registration as a deemed supplier of services [section 19 read with para 5(vii) of Schedule III]. The threshold limit of registration is not applicable to ISD. The registration of ISD under the existing regime (i.e. under Service Tax) would not be migrated in GST regime. All the existing ISDs will be required to obtain fresh registrations under new regime in case they want to operate as an ISD.

Q 3. What are the conditions/restrictions for distribution of credit?

Ans. The distribution of credit would be done subject to the following conditions:

a. Credit should be distributed through tax invoice or other document as prescribed;

b. Amount of credit distributed should not exceed the amount of credit available;

c. Credit should be distributed only to such suppliers to whom such services are attributable;

d. Credit in respect of services attributable to more than one supplier should be distributed proportionately on the basis of turnover of respective supplier during the preceding financial year.

Q 4. Is the ISD required to file return?

Ans. Yes, as per Section 27(6) of MGL, ISD is required to file monthly return by 13th of the following month in form GSTR-6.

Q 5. Can a company have multiple ISD?

Ans. Yes, different offices like marketing division, security division etc. may apply for separate ISD.

Q 6. What are the provisions for recovery of excess/ wrongly distributed credit by ISD?

Ans. Sections 18(1) and 18(2) provide for recovery of excess/wrongly distributed credit by initiating action against the ISD itself or against the recipient of credit so distributed under section 51 of the Model GST Law.

Q 7. Whether CGST and IGST credit can be distributed by ISD as IGST credit to units located in different States?

Ans. Yes, CGST credit can be distributed as IGST and IGST credit can be distributed as IGST by an ISD for the units located in different States (Section 17(1)).

Q 8. Whether SGST credit can be distributed as IGST credit by an ISD to units located in different States?

Ans. Yes, an ISD can distribute SGST credit as IGST for the units located in different States.(Section 17(2)

Q 9. Whether the ISD can distribute the CGST and IGST Credit as CGST credit?

Ans. Yes, CGST and IGST credit can be distributed as CGST credit by an ISD for the units located in same State.

Q 10. Whether the SGST and IGST Credit can be distributed as SGST credit?

Ans. Yes, ISD can distribute SGST and IGST credit for the units located in same State.

Q 11. What are the documents through which the credit can be distributed by an ISD?

Ans. The document under which the credit can be distributed is yet to be prescribed. The Act provides that the credit can be distributed only through prescribed document

Q 12. How to distribute common credit among all the units of an ISD?

Ans. The common credit used by all the units can be distributed by ISD on pro rata basis i.e. based on the turnover of each unit to the aggregate turnover of all the units to which credit is distributed.

Q 13. The ISD may distribute the CGST and IGST credit to recipient outside the State as

(a) IGST

(b) CGST

(c) SGST

Ans. (a) IGST.

Q 14. The ISD may distribute the CGST credit within the State as

(a) IGST

(b) CGST

(c) SGST

(d) Any of the above.

Ans. (b) CGST.

Q 15. The credit of tax paid on input service used by more than one supplier is

(a) Distributed among the suppliers who used such input service on pro rata basis of turnover in such State.

(b) Distributed equally among all the suppliers.

(c) Distributed only to one supplier.

(d) Cannot be distributed.

Ans. (a) Distributed among the suppliers who used such input service on pro rata basis of turnover in such State.

Q 16. Whether the excess credit distributed could be recovered by the department?

Ans. Yes, excess credit distributed could be recovered along with interest from an ISD by the department

Q 17. What are the consequences of credit distributed in contravention of the provisions of the Act?

Ans. The credit distributed in contravention of provisions of Act could be recovered from the unit to which it is distributed along with interest

INDEX OF ALL FAQs ON GOODS AND SERVICE TAX

S. No.Title of the Post
1.

FAQs on Overview of Goods and Services Tax (GST)

2.

GST: FAQ on Levy of and Exemption from Tax

3.

GST- FAQs on Registration under Goods and Service Tax

4.

GST- FAQS on Meaning and Scope of Supply

5.

FAQs on Time of Supply under Goods and Service Tax (GST)

6.

FAQs on Valuation in Goods and Service Tax (GST)

7.

FAQs on Payment of Tax under Goods & Service Tax

8.

FAQs on Electronic Commerce under Goods and Service Tax

9.

FAQs on Job Work under Goods and Service Tax

10.

FAQs on Input Tax Credit under Goods and Service Tax

11.

FAQs on Concept of Input Service Distributor in GST

12.

GST- FAQs on Returns Process & matching of Input Tax Credit

13.

FAQs on Assessment and Audit under GST

14.

FAQs on Refunds under Goods and Service Tax (GST)

15.

FAQs on Demands & Recovery under Goods and Service Tax

16.

FAQs on Appeals, Review and Revision in GST

17.

FAQs on Advance Ruling under Goods and Service Tax

18.

FAQs on Settlement Commission under Goods and Service Tax

19.

FAQs on Inspection, Search, Seizure and Arrest under GST

20.

GST FAQs on Offences & Penalties, Prosecution & Compounding

21.

FAQs on IGST under Goods and Service Tax

22.

FAQs on Place of Supply of Goods and Service under GST

23.

FAQs on Frontend Business Process on GST Portal

24.

FAQs on Transitional Provisions under Goods and Service Tax

25.

Download Exhaustive FAQ on GST by CBEC

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