ISD Registration Mandatory for Multi-location Taxpayers ?


ISD Registration Mandatory for Multi-location Taxpayers ?


Key amendments to the CGST Act have made ISD registration mandatory for taxpayers with multiple registrations, receiving services at their HO shared across branch offices.

Tax invoices received for services rendered under RCM are included in the revised definition and separate notification of distribution terms is required.

Regarding ISD registration, a recent Maharashtra AAAR order (Cummins India Limited, 2022) created confusion. The Circular No. 199/07/2023-GST clarified HO’s option to distribute ITC using ISD mechanism under Section 20 of the CGST Act. Many chose the cross-charge route.

Aligned with the 50th GST Council Meeting, this amendment necessitates ISD registration for HO of taxpayers with multiple offices. Expect additional compliances, including registration, timely returns, and coordination with vendors for accurate GSTIN reporting in GSTR-1 returns.

Use the following Roadmap to maintain compliance and streamline your ITC distribution processes:

  1. ISD registration and ITC distribution become mandatory for entities handling invoices for other branches.
  2. Multi-location entities must assess and prepare for compliance, involving ISD registration, vendor identification, and proper accounting.
  3. Reverse charge ITC will be distributed as common credit, based on RCM paid by other branches in the same state.
  4. The existing attribution system will be replaced with ITC distribution rules.
  5. ISD invoices will facilitate ITC distribution, allowing flexibility between CGST and IGST.


Krishnakant Jakhotia

Mobile No:-9422507911

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