Input Service Distributor in GST : Updated Study Material 2025

By | February 25, 2025
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Last Updated on: February 26, 2025

Input Service Distributor in GST : Updated Study Material 2025

Input Service Distributor provisions in GST has ben changed from 01.04.2025 here is the complete Study material

Relevant Articles for Input Service Distributor

Relevant Sections for Input Service Distributor

Section 2(61) of CGST Act 2017 Input Service Distributor

Section 20 CGST Act 2017 – Manner of distribution of credit by Input Service Distributor

Section 21. Manner of recovery of credit distributed in excess.

Section 24. Compulsory registration in certain cases.

Section 25. Procedure for registration { refer for Meaning of Distinct Persons}

Relevant Rules for Input Service Distributor

Rule – 39 Procedure for distribution of input tax credit by Input Service Distributor

Rule – 54 Tax invoice in special cases

Rule – 65 Form and manner of submission of return by an Input Service Distributor

Relevant Discusssion in GST Council Meeting

Recommendations of 52nd GST Council Meeting Dated 07 OCT 2023 

ii)         Law amendment with respect to ISD as recommended by the GST Council in its 50th meeting: GST Council in its 50thmeeting had recommended that ISD (Input Service Distributor) procedure as laid down in Section 20 of the CGST Act, 2017 may be made mandatory prospectively for distribution of ITC in respect of input services procured by Head Office (HO) from a third party but attributable to both HO and Branch Office (BO) or exclusively to one or more BOs. The Council has now recommended amendments in Section 2(61) and section 20 of CGST Act, 2017 as well amendment in rule 39 of CGST Rules, 2017 in respect of the same.

Recommendations of 53rd GST Council Meeting Dated 22 JUN 2024

    1. The Council recommended amendment in section 140(7) of CGST Act retrospectively w.e.f. 01.07.2017 to provide for transitional credit in respect of invoices pertaining to services provided before appointed date, and where invoices were received by Input Service Distributor (ISD) before the appointed date.

Recommendations of the 55th Meeting of the GST Council Dated 21 DEC 2024

    1. Amendment in provisions pertaining to Input Services Distributor (ISD) mechanism under CGST Act, 2017 and CGST Rules, 2017
    • Toamend Section 2(61) and Section 20(1) of the CGST Act, 2017 to explicitly include inter-state RCM transactions under the ISD mechanism by including reference to supplies subject to tax under section 5(3) and 5(4) of IGST Act, 2017 in the said provisions.
    • Consequentially, to amend section 20(2) of CGST Act, 2017 and rule 39(1A) of the CGST Rules, 2017.
    • These, amendments in CGST Act, 2017 are to be made effective from 01.04.2025.

 

Input Service Distributor in GST : Updated Study Material 2025