ISD Overview
The input service distribution (ISD) is a service that is implemented for a business with
a large share of common expenditure, and whose billing or payment is performed from a
centralized location. The ISD is used to distribute the tax credit amount on common invoices
only related to input services but not on goods (input or capital goods).
When the business is registered as an ISD in addition to the existing GST registration as a normal taxpayer, an ISD registration number is assigned to the business. This ISD registration number must be used when creating a purchase order line or cost invoice line, if the service must be provided by the ISD.
An Input Service Distributor (ISD) is a supplier’s office that receives tax invoices for input services and issues a prescribed document to distribute the credit of central tax (CGST), state tax (SGST), union territory tax (UTGST), or integrated tax (IGST) paid on these services to a supplier of taxable goods or services with the same PAN as the ISD.