अंतर्राष्ट्रीय लेखाकार एवं कॉर्पोरेट पेशेवर संगठन
The CBIC issued Notification No. 16/2024-Central Tax dated August 06, 2024, announcing that section 13 (Clause 13) of the Finance Act, 2024, will take effect on October 01, 2024, and section 11 (Clause 11) and section 12 (Clause 12) will take effect on April 1, 2025. These sections relate to the Input Service Distributor, the manner of distribution of credit by the Input Service Distributor and the penalty for failure to register certain machines used in the manufacture of goods as per the special procedure.
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Current provisions
Proposed Provisions
Effect
Clause 11– Section 2(61) – Input Service Distributor, effective from April 01, 2025
Section 2(61):
“Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office;
Section 2(61):
“Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office;, including invoices in respect of services liable to tax
under sub-section (3) or sub- section (4) of section 9, for or on behalf of distinct persons referred to in section 25, and liable to distribute the input tax credit in respect of such invoices in the manner provided in section 20;
Seeks to make Input Service Distributor (ISD) mandatory prospectively for distributing
Input Tax Credit (ITC) concerning
common input services acquired by the Head Office (HO) from a third party but applicable to both the HO and Branch Office (BO) or exclusively to one or more BOs.
Vide the proposed amendment, ISD can now pay GST for common input services under the reverse charge mechanism as per Sections
9(3) and 9(4) of the CGST Act and also distribute ITC related to such common input services.
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