Section-21. Manner of distribution of credit by Input Service Distributor
(1) The Input Service Distributor
shall distribute, in such manner as may be
prescribed, the credit of CGST as
CGST or IGST and IGST as IGST or CGST, by
way of issue of a prescribed document
containing, inter alia, the amount of input
tax credit being distributed or being
reduced thereafter, where the Distributor
and the recipient of credit are
located in different States.
(CGST ACT)
(1) The Input Service Distributor
shall distribute, in such manner as may be
prescribed, the credit of SGST as
SGST or IGST, by way of issue of a prescribed
document containing, inter alia, the
amount of input tax credit being distributed
or being reduced thereafter, where
the Distributor and the recipient of credit are
located in different States.
(SGST Act)
(2) The Input Service Distributor
shall distribute, in such manner as may be
prescribed, the credit of CGST and
IGST as CGST, by way of issue of a prescribed
document containing, inter alia, the
amount of input tax credit being distributed
or being reduced thereafter, where
the Distributor and the recipient of credit,
being a business vertical, are
located in the same State.
(CGST Act)
(2) The Input Service Distributor
shall distribute, in such manner as may be
prescribed, the credit of SGST and
IGST as SGST, by way of issue of a prescribed
document containing, inter alia, the
amount of input tax credit being distributed
or being reduced thereafter, where
the Distributor and the recipient of credit,
being a business vertical, are
located in the same State.
(SGST Act)
(3) The Input Service Distributor may
distribute the credit subject to the following
conditions, namely:
(a) the credit can be distributed
against a prescribed document issued to each of the
recipients of the credit so
distributed, and such document shall contain details as
may be prescribed;
(b) the amount of the credit
distributed shall not exceed the amount of credit
available for distribution;
(c) the credit of tax paid on input
services attributable to a recipient of credit shall be
distributed only to that recipient;
(d) the credit of tax paid on input
services attributable to more than one recipient of
credit shall be distributed only
amongst such recipient(s) to whom the input
service is attributable and such
distribution shall be pro rata on the basis of the
turnover in a State of such
recipient, during the relevant period, to the aggregate
of the turnover of all such
recipients to whom such input service is attributable
and which are operational in the
current year, during the said relevant period;
(e) the credit of tax paid on input
services attributable to all recipients of credit shall
be distributed amongst such
recipients and such distribution shall be pro rata on
the basis of the turnover in a State
of such recipient, during the relevant period,
to the aggregate of the turnover of
all recipients and which are operational in the
current year, during the said
relevant period.
Explanation 1. –For the purposes of this section, the “relevant
period” shall bePage
(a) if the recipients of the credit
have turnover in their States in the financial year
preceding the year during which
credit is to be distributed, the said financial
year; or
(b) if some or all recipients of the
credit do not have any turnover in their States in
the financial year preceding the year
during which the credit is to be distributed,
the last quarter for which details of
such turnover of all the recipients are
available, previous to the month
during which credit is to be distributed.
Explanation 2. - For the purposes of this section, ‘recipient of
credit’ means the
supplier of goods and / or services
having the same PAN as that of Input Service
Distributor.
Explanation 3. – For the purposes of this section, ‘turnover’ means
aggregate
value of turnover, as defined under sub-section (6) of
section 2.
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