Can ISD distribute the IGST/CGST/SGST paid under RCM as Input service distribution (ISD).

Input tax means [Section 2 (62)]     

“Input tax” in relation to a registered person, means the central tax, State tax, Integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes—

(a) The integrated goods and services tax charged on import of goods;

(b) The tax payable under the provisions of sub-sections (3) and (4) of section 9 (i.e. tax paid under reverse charge)

(c) The tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;; (i.e. tax paid under reverse charge)

(d) The tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; (i.e. tax paid under reverse charge) or

(e) The tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, (i.e. tax paid under reverse charge)

This means that RCM paid IGST / CGST / SGST / UTGST is also an input tax.

What is input tax credit? [Section 2 (63)]   

“Input tax credit” means the credit of input tax;

This means that the tax paid under RCM is also eligible for taking input tax credit.

Who is ISD and what he does? [Section 2 (61)]

Input Service Distributor (ISD) means an office of the supplier of goods or services or both which receives tax invoices towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said services to a supplier of taxable goods or services or both having same PAN as that of the ISD.

After analyzing the above fact I can say that the IGST / SGST / CGST paid under RCM mechanism can also be distributed by the ISD among its supplier of taxable goods or services or both having same PAN as that of the ISD.

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2 responses to “Can ISD distribute the IGST/CGST/SGST paid under RCM as Input service distribution (ISD).”

  1. Ronak jain says:

    how can i tranfer RCM credit to ISD, if in same State registration we have i.e. in Maharashtra we have normal or ISD registration and we have paid RCM in IGST then how can i transfer RCM credit to Normal registrtion because in GSTR 1 if POS same then IGST cannot be done..

    • Santosh Naik says:

      i also want clarification on same query. I check with many people but no-one have correct answered.

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