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Understanding the concept of the Input Service distributor and the Input services distribution rules for ISD.
this lecture would be dedicated to the
provisions related to input service
distributor before we get into
understanding input tax credit
provisions for input service distributor
we’ll call him is d let’s first check
out what an ISDN exactly is an ISDN is
an office of a supplier and can be just
one office of a supplier who has many
offices one office of a supplier who is
engaged in supplies of goods and
services and he has received a tax
invoice he has received a tax invoice
against input services only input
services not against inputs or capital
with only input services so an ISD is an
office of a supplier who is engaged in
supply of goods or services he’s
received tax invoice for input services
now we know that input acts would come
in SGS T C GST and i GST and he’ll be
able to distribute all of these taxes to
a supplier of goods and services having
a same and as the office of the supplier
the input service distributor so there’s
the important rule that you’ll have to
keep in mind the input service
distributor and the supplier should have
a same fun only then input service tax
credit can be transferred to this
supplier and he distributed this
distribution of ISDN has to follow
certain rules let’s call them the
distribution rules they are similar to
the set of rules that we discussed of
input ask reddit let’s check them out so
you have the input service distributor
and you have a credit recipient input
service distributors the one who has the
tax invoice and he has a right transfer
the credit to the supplier or the
recipient
this credit can include ICS TC GST and
SGS deep the rules are to do with the
location of the ISD and the recipient
and what tax which the ISD has received
can heat transfer and he threaded the
war axe so basically before and after
situation and the location we can draw a
three by two matrix to understand this
best though on the y-axis you have a
location of the ISD and the recipient
the first situation is where they are
both located within the same state and a
second there in different states and
x-axis has the credit received by the
ISD what we are trying to find out is as
what can the is cle distribute the
credit he’s received let’s take up the
first situation where the location is in
the same state board is Dion recipient
other in the same state and the ISD has
received a credit of see GST he can
transfer the see GST as C GST so C GST
can be transferred as C GST only if the
location is within the same state the
next box is for credit receive as GST
same state sc/st
can be distributed as s GST only the
third situation is where the ISD has
received credit for IGS t he can
distribute it as C GST or s GST if his
supplier
the recipient is within the same state
let’s check out the situation where is D
and the recipient are any difference
it’s if the ISD has received C GST then
he in distributed to the recipient as
either see GST or ID EST if he has
received as GST he can distributed as s
GST or izs t so i GST is common in both
the states and that’s the logic behind
transferring i see a steamboat city
the third is where is God IG st he can
transfer it distributed with the
recipient as CCSD or eyes EST so this is
the entire situation within the same
state you should even mind that
interstate sales attract IGS D while
intrastate sales attract see GST and s
GST and that’s the logic check out the
row for the same state he is not
distributing anything as IGS see if it’s
within the same state it’s either see
GST or as GST or book while in different
state IG St is present in all three
scenarios so that’s the logic interstate
attracts a GST so if the ISD and
recipient are in different states the
ISD can distribute everything as itst
while if they are in the same state he
may not distribute anything as a GST
that’s the logical you can keep in mind
and this becomes really easy