An Input Service Distributor (ISD) is a mechanism under the Goods and Services Tax (GST) system in India that allows a business to distribute the Input Tax Credit (ITC) of services received at a central location to its various branches or units. This is particularly useful for companies that have a head office receiving services (like consulting, software, advertising, etc.) but need to distribute the ITC to different locations.
ISD Registration Process in GST
If a business wants to function as an ISD, it must obtain a separate GST registration specifically as an ISD. Here’s how:
Step 1: Eligibility Check
- The applicant must be a registered entity under GST.
- The entity should only distribute ITC and not be engaged in outward taxable supplies.
- ISD is applicable only for distributing ITC on input services, not on goods.
Step 2: Apply for GST Registration as ISD
- Visit the GST Portal (www.gst.gov.in).
- Login or Register if applying for the first time.
- Choose "New Registration" and fill in the details:
- Business name
- PAN details
- Address of the business
- Nature of business
- Contact details
- Select "Input Service Distributor" as the type of registration.
- Upload required documents, such as:
- PAN Card
- Proof of business address
- Authorization letter from directors (if applicable)
- Bank account details
- Submit the application and verify with OTP.
- Receive GSTIN for ISD once approved.
Step 3: Compliance & Returns Filing
- An ISD must file GSTR-6 monthly to distribute ITC to the branches.
- The ITC must be distributed only to units registered under the same PAN.
- ISD cannot claim ITC but can only pass it on.
Documents Required for ISD (Input Service Distributor) Registration
For Businesses with Multiple Units
⇒ PAN Card of the business entity.
⇒ Certificate of Incorporation or LLP Agreement
⇒ Address Proof of the Business Entity
• Utility Bill, Rent Agreement, etc.
• GST Registration Certificate of the business.
⇒ Details of Business Operations
• Nature of business and details of input services being distributed.
⇒ List of GSTIN (Goods and Services Tax Identification Numbers) of all branches or units.