GST Update

The Affluence GST team highlights key aspects of the amended 𝑰𝒏𝒑𝒖𝒕 𝑺𝒆𝒓𝒗𝒊𝒄𝒆 𝑫𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒐𝒓 (𝑰𝑺𝑫) provisions to help businesses stay compliant:

✅ 1. Is distribution of credit through ISD mandatory?
𝐀𝐧𝐬: Yes, from April 1, 2025, common credit must be distributed through the ISD mechanism.

✅ 2. Is separate registration required for ISD?
𝐀𝐧𝐬: Yes, a separate ISD registration must be obtained, usually at the Head Office location.

✅ 3. What type of credit needs to be distributed through ISD?
𝐀𝐧𝐬: Credit corresponding to Input Services benefiting one or more registrations must be distributed.

✅ 4. What is the basis for distributing credit under ISD?
𝐀𝐧𝐬: Distribution will be based on the turnover of the previous financial year on a pro-rata basis. If not available, turnover of the previous quarter will be considered.

✅ 5. Is distribution limited to eligible credit only?
𝐀𝐧𝐬: No, both eligible and ineligible credit must be distributed.

✅ 6. Should RCM credit be distributed through ISD?
𝐀𝐧𝐬: Yes, ITC on common expenses where GST is paid under RCM must be distributed through ISD, although ISD itself is not liable to discharge tax under RCM.

✅ 7. Will cross charge still apply after ISD implementation?
𝐀𝐧𝐬: Yes, for the transfer of credit pertaining to inputs or internally generated services, cross charge will remain relevant.

💡 Need Further Guidance?
For detailed insights or clarifications, feel free to connect with 𝐂𝐀 Aakash Sarda from the Affluence Advisory GST Team.