New to GST and not sure which registration type applies to you? Start with our GST registration guide.
What an Input Service Distributor is
An Input Service Distributor is an office of the supplier of goods or services that receives tax invoices for input services, including invoices for services liable to tax under section 9(3) or 9(4), and distributes that credit to the other registrations under the same PAN. The definition sits in section 2(61) and the distribution rules in section 20. Registration is compulsory under section 24(viii), and the amendments that made it compulsory took effect on 1 April 2025. Typical common services are statutory audit, legal advice, software subscriptions, insurance and brand or marketing spend.
| Term | What it means |
|---|---|
| Input Service Distributor | A separate registration, under the same PAN, whose only function is to receive invoices for common input services and distribute the credit to the other registrations. It makes no outward supplies of its own. |
| GSTR-6 | Monthly ISD return, due by the 13th of the following month. It shows the credit received and the credit distributed to each recipient GSTIN, and the amount distributed cannot exceed the amount received. |
| ISD invoice | Invoice issued by the ISD to each recipient GSTIN under Rule 54(1), showing the credit distributed. Where a distribution has to be reduced or increased later, an ISD credit note or debit note is issued in the same form. |
Do you need an ISD registration?
Work through three questions. If all three answers are yes, you need one.
- Do you hold more than one GSTIN under the same PAN? Two state registrations, or two registrations in one state, both count.
- Does one office receive tax invoices for input services that more than one of those registrations uses? Statutory audit, legal retainers, software subscriptions, group insurance, advertising and brand spend are the usual ones.
- Are those invoices addressed to that office rather than to the registration that consumes the service? If each branch is billed directly for what it uses, there is nothing common to distribute.
Where only one registration uses a service, bill it to that registration. Nothing is gained by routing single-use services through an ISD, and it makes the monthly working harder than it needs to be.
An ISD registration makes no outward supplies of its own. It exists only to receive and pass on credit, and it files GSTR-6 rather than GSTR-1 and GSTR-3B.
What changed on 1 April 2025
Until 31 March 2025 an ISD registration was optional. Many groups instead cross charged common services from head office to branches, raising a tax invoice and letting each branch claim credit on it. That route was disputed by the department in several cases.
The amendments to sections 2(61) and 20 of the CGST Act came into force on 1 April 2025 and made the position clear:
- ISD registration is compulsory under section 24(viii) where common input services are received for more than one registration under the same PAN.
- The definition now covers reverse-charge invoices, that is invoices for services liable to tax under section 9(3) or 9(4).
- Distribution is on the terms in section 20 and Rule 39, not on whatever internal allocation the group used before.
If you have been cross charging since April 2025, you are late rather than wrong in principle. Register now and regularise the periods since 1 April 2025; do not simply start from the current quarter and hope the earlier periods are not examined.
The registration process
- Identify the common services. Separate the services used by more than one GSTIN from those used by only one, then work out the Rule 39 turnover ratio for the relevant period. Services used by a single registration are billed to that GSTIN directly and never go through the ISD.
- File the registration as an Input Service Distributor under the same PAN, and receive the certificate in Form GST REG-06.
- Set up the paperwork. We set out the ISD invoice format required by Rule 54(1), the recipient list and the distribution working for each month, so your accounts team can produce it.
- File the return. GSTR-6 filed by the 13th of the following month, after which the distributed credit is reflected to each recipient GSTIN on the portal.
We check every scan for name, address and signature mismatches before the application goes in.
Documents you will need
- Entity PAN and certificate of incorporation, partnership deed or registration certificate
- The existing GSTINs held under the same PAN, with their states
- PAN and Aadhaar of the authorised signatory, with the board resolution or authorisation letter
- Address proof for the office that will be registered as the ISD
- Bank account proof
- A month of head-office invoices for the common input services, so the review can be done before filing
ISD registration fee
Our professional fee is ₹999 for the ISD registration. There is no government fee for GST registration.
| Item | Amount |
|---|---|
| Regikart professional fee, ISD registration | ₹999 |
| Government fee for the registration application | No government fee |
| Monthly distribution working and GSTR-6 filing | On quote, by number of recipient GSTINs |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 22 September 2026.
Interest and late fees are separate and are paid to the government. Credit distributed in excess of what is permitted is recovered from the ISD or the recipient with interest at 18% a year under section 50(1).
What is included: a review of the invoices billed to your head office, a list of what must go through the ISD and what should be billed directly, the registration application, the REG-06 certificate, the ISD invoice format required by Rule 54(1) and the first month's distribution working.
How the credit is distributed under Rule 39
Distribution is mechanical once the inputs are right. Credit to a recipient equals the total credit to be distributed, multiplied by that recipient's turnover in the relevant period, divided by the aggregate turnover of all recipients.
The relevant period is the preceding financial year, where every recipient had turnover in that year. Where one or more did not, it is the last quarter before the month of distribution for which turnover figures are available for all of them.
Four rules to apply while doing it
- Distribute eligible credit and credit that is ineligible under section 17(5) separately, so each recipient can see what it may and may not use.
- Distribute CGST, SGST and IGST separately.
- IGST credit is distributed as IGST to every recipient.
- CGST and SGST credit is distributed as CGST and SGST where the recipient is in the same state as the ISD, and as IGST where the recipient is in another state.
A worked example. Illustrative figures. A group with three registrations receives one audit invoice at the head office for ₹5,00,000 plus ₹90,000 IGST, all of which is common.
| Recipient GSTIN | Turnover in the relevant period | Share | IGST credit distributed |
|---|---|---|---|
| Maharashtra | ₹6,00,00,000 | 60% | ₹54,000 |
| Karnataka | ₹3,00,00,000 | 30% | ₹27,000 |
| West Bengal | ₹1,00,00,000 | 10% | ₹9,000 |
| Total | ₹10,00,00,000 | 100% | ₹90,000 |
Each recipient gets an ISD invoice for its share, and the ISD reports all three lines in that month's GSTR-6. The amount distributed in a month cannot exceed the amount received in that month.
Reverse-charge credit through the ISD
Since 1 April 2025 the ISD route also carries credit on services on which the group pays tax under reverse charge.
The sequence is specific, because an ISD cannot pay tax itself:
- The entity's normal registration at the same location pays the reverse-charge tax and reports it in its GSTR-3B.
- That registration then raises an invoice to the ISD under Rule 54(1A) for the credit.
- The ISD distributes it to the recipient GSTINs in the same way as credit on a forward-charge invoice.
So a group with an ISD needs the ordinary GSTIN at that location as well. Keep the two sets of books apart: the ISD's only entries are credit in and credit out.
Forms, returns and what the ISD cannot do
| Item | Position |
|---|---|
| Registration | A separate registration under the same PAN, applied for as an Input Service Distributor. Compulsory under section 24(viii) |
| Document to each recipient | ISD invoice under Rule 54(1); ISD credit note or debit note for later adjustments |
| Return | GSTR-6, by the 13th of the month following the month of distribution |
| Returns the ISD does not file | GSTR-1 and GSTR-3B, because it makes no outward supplies and pays no tax |
| Credit on goods | Cannot be distributed. It stays with the registration that procured the inputs or capital goods |
| Recipients | Only registrations under the same PAN |
| Cap | Credit distributed in a month cannot exceed credit received in that month |
Every GST, income-tax and ROC date is in our compliance calendar. Our GST return filing service covers GSTR-6 alongside the GSTR-1 and GSTR-3B of each recipient registration.
Why Regikart for ISD registration
Regikart is a CA and CS firm serving 250+ clients from offices in Kolkata (head office), Delhi and Bengaluru. Every ISD application and the first distribution working are reviewed by a Chartered Accountant.
- We start with your invoices, not a template. The question is which services are actually common to more than one GSTIN, and that decides the whole exercise.
- Late is normal, and fixable. If you have been cross charging since April 2025, we plan the registration and the catch-up together.
- Fixed fee of ₹999 for the registration, with no government fee to add.
- One team afterwards: GSTR-6 each month, the recipient registrations' own GST returns, the books and any GST notice on a credit mismatch.
Not sure whether your shared invoices need an ISD at all? Send us a list of the services billed to your head office and a CA will tell you which of them must go through an ISD.