GSTR-6 is the monthly return filed by Input Service Distributors (ISD) — entities that receive common service invoices at a central location and distribute the Input Tax Credit proportionally to multiple branches. Essential for multi-location businesses optimizing their ITC utilization.
An ISD is a mechanism under GST to distribute input tax credits from common services to multiple branches:
Head office or a registered branch receives invoices for services consumed by multiple branches — like IT services, legal fees, audit fees, rent for shared offices.
ISD distributes the Input Tax Credit proportionally to all recipient branches using ISD invoices. Each branch then uses that ITC to offset their own output tax.
ISD must obtain a separate GST registration specifically as an Input Service Distributor — in addition to any regular GST registration the entity may have.
ISD mechanism applies only to input services and capital goods credits. It does NOT apply to input goods (raw materials, stock) — those credits stay with the purchasing unit.
Section 20 of the CGST Act prescribes how ISD must distribute credit:
ITC must be distributed in proportion to the turnover of each recipient branch in the state/UT to the aggregate turnover of all recipients.
ITC for Branch = (Turnover of Branch / Total Turnover of All Recipients) × Total ITCCredit of CGST must be distributed as CGST, SGST as SGST, and IGST can be distributed as IGST, CGST, or SGST depending on intra/inter-state distribution.
If ISD and recipient are in the same state → distribute as CGST + SGST.
If ISD and recipient are in different states → distribute as IGST.
If original supplier issues a credit note reducing ITC, ISD must issue a corresponding ISD credit note to reduce the distributed credit proportionally.
Details of all invoices received from suppliers — supplier GSTIN, invoice number, date, taxable value, and tax components (CGST, SGST, IGST, Cess). Also includes credit notes received.
Details of ISD invoices/credit notes issued to recipient branches — recipient GSTIN, document number, date, and distributed tax amounts.
Intra-state distribution details — CGST and SGST/UTGST amounts distributed to branches within the same state as the ISD.
Inter-state distribution details — IGST amounts distributed to branches in other states. Includes both eligible and ineligible credit distribution.
Corrections to ISD invoices or credit notes reported in earlier GSTR-6 periods.
Net ITC received vs distributed. Any mismatch must be reconciled. ISD cannot have output tax liability — only distributes input credits.
Apply for ISD registration using GST REG-01. Select 'Input Service Distributor' as the type. A separate GSTIN is issued for ISD operations.
Receive all service invoices at the ISD-registered location. Verify supplier GSTIN, HSN/SAC codes, and tax amounts against GSTR-2B auto-populated data.
Determine each branch's share using the pro-rata formula: Branch Turnover ÷ Total Turnover of All Recipients × Total ITC Available.
Issue ISD invoices to each recipient branch with distributed CGST, SGST, IGST amounts. Each invoice must contain prescribed particulars per Rule 54(1).
Login to gst.gov.in → Returns → GSTR-6 → Select month → Enter inward supplies (Table 3) and ISD invoices issued (Table 4–6).
Verify total ITC received matches total ITC distributed. Preview summary → File via DSC or EVC → Download acknowledgment.
GSTR-6 must be filed by the 13th of the month following the tax period. For example, GSTR-6 for March 2026 is due by April 13, 2026. Late filing attracts ₹50/day (₹25 CGST + ₹25 SGST) late fee.
No. ISD can only distribute credit for input services and capital goods. Credits for input goods (raw materials, trading goods) cannot be distributed through ISD mechanism — they must be claimed by the unit that purchases them.
If ISD distributes more credit than eligible, the excess must be recovered from recipient branches. ISD should issue a credit note reducing the distributed amount. The excess credit must be added back to recipient's output liability with interest.
Yes. A company can have regular GST registration for making taxable supplies AND a separate ISD registration for distributing input service credits. These are two distinct GSTINs with different return obligations.
Partially. GSTR-6 Table 3 (inward supplies) is auto-populated from suppliers' GSTR-1. The ISD must verify this data, add any missing invoices, and then prepare distribution details in Tables 4–6.