ISD Invoice reg

This query is : Resolved

Marimuthu (Querist)
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24 June 2024 Dear Experts,
1 A company is availing the engineering consulting service from the serivice provider.
2 The company is registered under GST.
3 Also this company has obtained the ISD registeration with GST Dept.
4 Now the query:
a Whether the service provider able to raise the service invoice in favour of service recipient's ISD GSTIN?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Yes, the service provider can raise the service invoice in favor of the service recipient's Input Service Distributor (ISD) GSTIN. Here’s how it works in the context of GST:

1. **Input Service Distributor (ISD) Registration:** A company obtains ISD registration under GST to distribute the credit of GST paid on input services to its various branches or units that are separately registered under GST.

2. **Invoice Issuance:** According to GST rules, an ISD can distribute the credit of GST paid on input services to its branches or units by issuing an ISD invoice. This invoice must clearly indicate that it is issued as an ISD invoice and should contain details required under GST law.

3. **Service Provider Issuing Invoice:** The service provider can issue the invoice directly in favor of the ISD GSTIN of the recipient company. The ISD GSTIN should be clearly mentioned on the invoice along with other mandatory details such as description of services, GSTIN of the service provider, GST amount charged, etc.

4. **Claiming Input Tax Credit (ITC):** Upon receiving the ISD invoice, the recipient company (ISD) can distribute the eligible input tax credit (ITC) to its various branches or units. The distribution is based on the proportion of turnover or any other reasonable basis as prescribed under GST rules.

5. **Compliance:** Both the service provider and the recipient company (ISD) must ensure that all GST compliance requirements are met, including issuing correct invoices, filing GST returns, and maintaining proper records.

Therefore, the service provider can raise the service invoice directly in favor of the ISD GSTIN of the recipient company, allowing for proper distribution of input tax credit under GST. If there are specific circumstances or variations in the process, consulting with a GST expert or chartered accountant would be advisable to ensure compliance with GST regulations.