Compulsory Input Service Distributor Input Service Distributor Registration

 

Until now, organisations with multiple GST registrations under a single PAN could either use the Input Service Distributor  mechanism or adopt a cross-charge approach to distribute common input services like rent, audit fees, and software licenses across different units. Many opted for cross-charge due to its operational simplicity, despite its complexities in ITC distribution and tax reconciliation,

However, from April 1, 2025, ISD registration will become mandatory for such taxpayers. Under this model, businesses must issue ISD invoices and file GSTR-6 returns to distribute Input Tax Credit (ITC) across branches.

 

S K and Associates