Yes, ISD registration is mandatory under GST from 1 April 2025 for any office that receives third party invoices for input services used by two or more of your GSTINs under the same PAN. There is no turnover threshold and no government fee: you apply in Form GST REG-01 as an Input Service Distributor and then file GSTR-6 every month by the 13th. For seven years this was a choice between ISD and cross-charge. It is not any more.
Yes, from 1 April 2025. The Finance Act, 2024 rewrote the definition of Input Service Distributor in Section 2(61) and the distribution rule in Section 20 of the CGST Act, and Notification No. 16/2024 - Central Tax dated 6 August 2024 brought both into force from 1 April 2025. Any office that receives tax invoices for input services, including reverse charge services, for or on behalf of other GSTINs under the same PAN must now register as an ISD and distribute that credit. Cross-charge is no longer an alternative for those third party services.
| Your set-up | ISD registration needed? |
|---|---|
| One GSTIN only, any turnover | No. There is no other registration to distribute to. |
| Several GSTINs, but every vendor bills each GSTIN directly for what it uses | Usually no, provided no invoice for a shared service lands on one office. |
| Head office receives invoices for software, audit, legal, advertising or insurance used by branches in other states | Yes, from 1 April 2025. |
| Head office pays reverse charge on a common service (for example, legal fees) used by several GSTINs | Yes. Reverse charge invoices are inside the amended definition. |
| One branch performs services for another branch using its own staff | No. That is an internal supply and stays on cross-charge. |
| Credit on goods or capital goods used by several branches | No. ISD covers input services only. |
Sources: Sections 2(61), 20, 21 and 122 of the CGST Act, 2017; Notification No. 16/2024 - Central Tax; Rule 39 as substituted by Notification No. 12/2024 - Central Tax dated 10 July 2024; GST portal GSTR-6 FAQs.
The ISD sits alongside your normal GST registrations; it does not replace any of them, and your branches keep filing their own GSTR-1 and GSTR-3B.
A company’s ISD is in West Bengal. In June 2026 it receives a cloud software invoice with ₹1,80,000 of GST (₹90,000 CGST + ₹90,000 SGST) used by all three of its registrations. Rule 39 splits common credit in proportion to each recipient’s turnover in the relevant period, which is the previous financial year (FY 2025-26) where all recipients had turnover in that year.
| Recipient GSTIN | Turnover FY 2025-26 | Share | Credit distributed | Distributed as |
|---|---|---|---|---|
| West Bengal | ₹6,00,00,000 | 50% | ₹90,000 | ₹45,000 CGST + ₹45,000 SGST |
| Karnataka | ₹3,60,00,000 | 30% | ₹54,000 | ₹54,000 IGST |
| Delhi | ₹2,40,00,000 | 20% | ₹36,000 | ₹36,000 IGST |
| Total | ₹12,00,00,000 | 100% | ₹1,80,000 |
Formula: C1 = (t1 ÷ T) × C, where C is the credit to distribute, t1 the recipient’s turnover and T the total turnover of all recipients that use the service. The recipient in the ISD’s own state keeps the CGST and SGST character; recipients in other states receive it as IGST. A service used by only one branch, say a recruitment fee for the Delhi branch alone, goes 100% to Delhi and is not apportioned. All of this is distributed in June itself, reported in June’s GSTR-6 by 13 July 2026, and each branch claims its share in its own GSTR-3B.
Illustrative figures. Eligible and ineligible credit are distributed separately, and each tax head is worked separately.
| Item | What it is | Timing |
|---|---|---|
| GSTR-6A | Auto-drafted, read-only list of invoices your suppliers reported against the ISD GSTIN | Populates as suppliers file GSTR-1 (11th for monthly filers) |
| GSTR-6 | Monthly ISD return: inward invoices plus distribution to each recipient | 13th of the following month; nil return if nothing to distribute |
| ISD invoice / ISD credit note | Document issued to each recipient to pass or reduce credit | Same month as the credit is distributed |
| Recipient’s GSTR-3B | Where each branch claims the credit received from the ISD | Branch’s own due date |
Most errors we see come from turnover figures picked from the wrong period, goods credit pushed through the ISD, and vendors still billing the operating GSTIN. Our GST reconciliation work checks GSTR-6A against your AP ledger before every filing.
Pick the speed and depth that matches your need. Same quality, same CA team — only the timeline changes.
Timeline: Monthly, by the 13th
Timeline: 3 working days to register
Timeline: Ongoing, per recipient GSTIN
Government fee — paid by you at actuals
Nil. GST law prescribes no fee for a registration application of any kind, and an ISD registration is obtained through the ordinary FORM GST REG-01 by selecting Input Service Distributor as the reason. The only government-side cost you may incur is a Class 3 Digital Signature Certificate, from ₹499, if you do not already hold one.
Every price above is a professional fee, excluding GST and government charges. 50% upfront, 50% on delivery.
All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.
We look at your registration map and your accounts payable ledger and tell you whether the mechanism applies, and from when. If it does not, we say so, and that is the end of it. A meaningful number of enquiries end here.
We identify which spend heads are genuinely common across registrations, which belong to a single GSTIN exclusively, and which are internal supplies that stay on cross-charge.
Filed through FORM GST REG-01 selecting Input Service Distributor as the reason, with the DSC and authorisation handled. Since 1 November 2025 a low risk application is granted electronically within three working days under Rule 9A.
Registering does nothing on its own. We write to each affected vendor with the ISD GSTIN and effective date, then check the following month’s invoices actually carried it. If your vendors keep billing the operating GSTIN, the ISD has nothing to distribute.
Reconcile GSTR-6A, apply the Rule 39 allocation, raise ISD invoices and file by the 13th, including nil months. Credit available in a month must be distributed in that same month and cannot be parked.
Where the period since 1 April 2025 was handled on cross-charge, we quantify the exposure at branch level and set out the options rather than leaving it unaddressed.
Tell us your requirement, a CA will call you in 30 minutes.
The Finance Act, 2024 amended Sections 2(61) and 20 of the CGST Act, and Notification No. 16/2024 - Central Tax appointed the commencement date. CBIC’s earlier Circular No. 199/11/2023 confirming the route was optional is what most finance teams still remember, and it is why so many groups are confident they are compliant when they are not.
It turns on the structure of your business, not its size. A small company with three state registrations and a centrally purchased software licence is caught. A very large single-state business is not.
If third party common services were cross-charged after 31 March 2025, the prevailing professional view is that the receiving branch is not entitled to that credit, because the route prescribed by Section 20 was not followed. That points to reversal with interest plus penalty exposure under Section 122. The amended provisions have not been tested in litigation yet, so this is the prevailing view rather than a settled outcome.
ISD covers input services a third party billed to one office for use across several registrations. Cross-charge survives only for services one branch genuinely renders to another internally. The test we use: did money leave the group to a third party, and does more than one registration benefit? If yes to both, it is ISD.
The mechanism is limited to input services. Credit on goods and capital goods stays where it arises. The amended definition does bring reverse charge invoices on common input services inside the mechanism.
Credit has to arrive in the ISD registration before it can be distributed, and that depends entirely on how your vendors address their invoices. We treat that instruction as part of the job rather than as your homework, because it is the part that determines whether any of it works.
GSTR-6A only fills once your suppliers have filed GSTR-1, which for monthly filers is the 11th. That leaves roughly one clear working day to reconcile, decide the allocation, raise ISD invoices and file. A group that begins its workings on the 12th will miss, repeatedly.
An unnecessary ISD registration means filing nil GSTR-6 returns indefinitely, and those returns fall under the same three year bar as any other. Saying no is a better outcome than a registration you then have to maintain.
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