28th April 2017
Input Service Distributor (ISD) implies an office of the supplier of goods, benefits and services or both which receives tax invoices towards receipt of input services and issues an endorsed record for the reasons for distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said benefits to a merchandiser claiming taxable products or benefits or both having same PAN as that of the ISD.
An ISD is necessary to acquire a different registration despite the fact that it may be independently registered. The starting point from claiming enrolment or registration is not pertinent to ISD under the present regime (i.e. under Service Tax) and would not be relocated in GST regime. All the existing ISDs will be obliged to acquire a fresh registration under new regime in case they want to work an ISD.
The ideas of Input Service Distributor under GST and other different interconnected laws have been kept adjusted to maintain the existing position.
Under present tax regime the concept of Input Service Distributor comprise of
Therefore, the accessible CENVAT to ISD is distributed by it to its units and outsourced producers. Input Service Distributor under GST Model contains
The meaning and rules are quite alike under both the models with very little dissimilarity
ISD may issue a record to an office carrying the same PAN similar to ISD. Contrary to the present model credit cannot be disseminated to outsourced producers or service suppliers. The basis might be due to the shift of taxable event manufacture to supply. The tax liability might emerge at the time of supply which would be eventually paid by ISD on utilization of available input tax credit.
The credit of CGST, IGST and SGST shall be spread, in the manner as per below chart
The arrangements under existing tax laws have been kept adjusted under Model GST Law in order to continue all the benefits available to Input Service Distributor with stability.
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