An Input Service Distributor (ISD) GST act 2017 is a registered person appointed by a group of companies having the same PAN to distribute the input tax credit (ITC) on inward supplies of services received by them, to the eligible recipient units within the group. They have specific requirements for filing returns under the GST Act, 2017.

Form for Return:

ISDs are required to file their return electronically in Form GSTR-6 for every calendar GST act 2017month or part thereof. This form captures details of:

• Credit Received:
  • Input tax credit received from service providers on taxable services used by the group companies.
  • Details of invoices issued by the service providers.
• Credit Distributed:
  • Input tax credit distributed to each recipient unit within the group based on their eligible proportion.
  • Details of ISD invoices issued to each recipient unit.

Manner of Submission:

• GSTR-6 must be submitted GST act 2017electronically through the GST portal within 13 days from the end of the month for which the return is being filed.
• Late filing attracts penalty as per provisions of the GST Act.

Additional Requirements:

• The amount of ITC distributed cannot exceed the available ITC with the ISD at the end of the relevant month.
• ISD can file only GSTR-6 and do not need to file any separate statement of inward and outward supplies.
• Information for GSTR-6 can be obtained from GSTR-2B return which reflects details of inward supplies of services.

                                      EXAMPLE

Form:

Every ISD, regardless of the specific state in India, must file the GSTR-6 form GST act 2017electronically. This form captures details of both the input tax credit (ITC) received by the ISD from service providers and the ITC distributed by the ISD to its recipient units.

Manner of Submission:

• Due Date: The return must be filed for every calendar month or part thereof within 13 days after the end of the month. For example, the GSTR-6 for December 2023 must be filed by January 13, 2024.
• Additional Information:
  • The return should contain details like:
    • Supplier’s GSTIN and invoice details.
    • Type of service received.
    • Eligible ITC amount.
    • Proportion of ITC distributed to each recipient unit based on their turnover.
  • The recipient units should acknowledge the receipt of the ITC distributed through the ISD mechanism by filing their respective GSTR-2A return.

Specific State Considerations:

While the basic principles of ISD GST act 2017return filing remain the same across India, there might be specific state-level instructions or clarifications issued by the respective GST authorities. It’s advisable to check the official GST portal of the relevant state for any additional requirements or updates.

                            FAQ QUESTIONS

1. Who is required to file GSTR-6?

Every taxable person registered as an Input GST act 2017 Service Distributor (ISD) must file GSTR-6 electronically for every calendar month or part thereof.

2. What is the due date for filing GSTR-6?

The due date for filing GSTR-6 is 13th day after the end of the month to which the return pertains.

3. Which form is used for filing ISD return?

The only form used for filing ISD return is GSTR-6.

4. What details are required to be furnished in GSTR-6?

GSTR-6 requires details of:

• Input tax credit (ITC) received by the ISD from service providers.
• Distribution of ITC to recipient units (having the same PAN) based on a pre-determined formula.
• Any reversal of ITC due to cancellations or adjustments.
• Tax liability, if any.

5. Can an ISD distribute more ITC than available?

No, the amount of ITC distributed cannot exceed the amount of ITC available with the ISD at the end of the relevant month.

6. What happens if GSTR-6 is not filed on time?

Late filing of GSTR-6 attracts late filing fees as per GST rules.

7. Do ISDs need to file any other returns apart from GSTR-6?

As ISDs already GST act 2017report inward and outward supplies in their GSTR-6, they are not required to file a separate statement of inward and outward supplies.

                                CASE LAWS

While Section 39 of the GST Act primarily specifies the timeline for furnishing returns, GST act 2017case laws have delved deeper into the forms and manner of submission for Input Service Distributors (ISDs). Here’s an overview:

Forms:

• Form GSTR-6: This is the primary return form for ISDs, mandatorily used to report details of tax invoices on which credit has been received and those issued under section 20. (Rule 65 of CGST Rules, 2017)
• Form GSTR-1: While GST act 2017 not directly required for ISDs, filing Form GSTR-1 on time is crucial for pre-populating details in Form GSTR-6A used for reconciliation. (Section 37 of CGST Act)

Manner of Submission:

• Electronically: Like all GST returns, ISD returns must be submitted electronically through the GST Common Portal. (Section 39(4) of CGST Act)
• Direct or Facilitation Centre: ISDs can submit the return directly or through a notified Facilitation Centre. (Rule 65 of CGST Rules, 2017)

Case Law Highlights:

• Vivo Mobile India Limited vs. Union of India (WTAX No. 433 of 2021): This case GST act 2017emphasized the importance of timely filing GSTR-1 for ISDs to utilize input tax credit (ITC) accurately. Non-compliance with filing deadlines can lead to discrepancies in GSTR-2A and subsequent issues in claiming ITC.
• M/s. Uflex Ltd. vs. Commissioner of State Tax (2020-21): This case GST act 2017clarified that ISDs who receive invoices containing both taxable and exempt services need to segregate and distribute the ITC only on the taxable portion.

Additional Points:

• Rule 60(5) of CGST Rules mandates GST act 2017 electronic transmission of ISD return details to recipients via Form GSTR-2A for inclusion in their GSTR-2 return.
• ISD returns are crucial for reconciling ITC claimed by recipients, and any discrepancies can trigger scrutiny by tax authorities.