Input Service Distributor (ISD)

What it is

An office that receives invoices for input services used by several GSTINs of the same PAN (e.g. head-office rent, audit fees, advertising) and distributes the credit to those branches.

When it is compulsory

From 1 April 2025, a business must register as an ISD and distribute such common input-service credit through it. The alternative of cross-charging for these services is no longer an option for third-party common services.

How distribution works

• Credit is distributed monthly through an ISD invoice.
• Common credit is shared among recipient units in proportion to their turnover in the relevant period; credit relating to one unit goes only to that unit.
• CGST/SGST credit is distributed as IGST to units in other states, and as CGST/SGST to units in the same state.
• Return: GSTR-6 by the 13th of the next month. Recipients see the credit in GSTR-6A / their GSTR-2B.

Set-up steps

1. Take a separate ISD registration (REG-01, type ISD).
2. Ask suppliers of common services to bill the ISD GSTIN.
3. Distribute monthly and file GSTR-6.

Sources

• Mandatory Input Service Distributor regime (amended sections 2(61) and 20) from 1 April 2025