Why a tax invoice by input tax distributor is required

Section 21 of GST model Law covers the provisions for manner of distribution of credit by an ISD. The instrument for such distribution is tax invoice by input services distributor.

Section 2(54) of Model GST draft defines the term Input services distributor as:

“Input Service Distributor” means an office of the supplier of goods and / or services which receives tax invoices issued under section 28 towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above”

• An input services distributor receives the tax invoices towards the receipts of Input services
• An ISD issues the prescribed document for distributing the credit of GST.
• Tax invoice by Input services distributor is required to distribute that credit to other offices having the same PAN.
• A registered taxable person can be registered as ISD only if it is engaged in supply of services
• In simple words ISD receives the tax invoices for input services and distribute that credit to different branches

Related Topic:
Input Service Distributor (ISD)

Data required to be provided in Tax Invoice by Input services distributor

A tax invoice by input services distributor shall contain the following details:-

1. name, address and GSTIN of the Input Service Distributor;
2. a consecutive serial number containing only alphabets and/or numerals, unique for a financial year;
3. date of its issue;
4. name, address and GSTIN of the supplier of services, the credit in respect of which is being distributed and the serial number and date of invoice issued by such supplier;
5. name, address and GSTIN of the recipient to whom the credit is distributed;
6. amount of the credit distributed; and
7. signature or digital signature of the supplier or his authorized representative