THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
INPUT TAX CREDIT
Section 20: Manner of distribution of credit by Input Service Distributor. (Relevant Rule 39, Rule 54)
(1) The Input Service Distributor shall distribute the credit of
central tax as central tax or integrated tax and integrated tax as integrated
tax or central tax, by way of issue of a document containing the amount of
input tax credit being distributed in such manner
as may be prescribed.
(2) The Input Service Distributor
may distribute the credit subject to the following conditions, namely:––
a)
the
credit can be distributed to the recipients of credit against a document
containing such details as may be prescribed;
b)
the
amount of the credit distributed shall not exceed the amount of credit
available for distribution;
c)
the
credit of tax paid on input services attributable to a recipient of credit
shall be distributed only to that recipient;
d)
the
credit of tax paid on input services attributable to more than one recipient of
credit shall be distributed amongst such recipients to whom the input service
is attributable and such distribution shall be pro rata on the basis of the
turnover in a State or turnover in a Union territory of such recipient, during
the relevant period, to the aggregate of the turnover of all such recipients to
whom such input service is attributable and which are operational in the
current year, during the said relevant period;
e)
the
credit of tax paid on input services attributable to all recipients of credit
shall be distributed amongst such recipients and such distribution shall be pro
rata on the basis of the turnover in a State or turnover in a Union territory
of such recipient, during the relevant period, to the aggregate of the turnover
of all recipients and which are operational in the current year, during the
said relevant period.
Explanation.––For the purposes of
this section,––
(a) the “relevant period” shall be––
(i)
if
the recipients of credit have turnover in their States or Union territories in the
financial year preceding the year during which credit is to be distributed, the
said financial year; or
(ii)
if
some or all recipients of the credit do not have any turnover in their States
or Union territories in the financial year preceding the year during which the
credit is to be distributed, the last quarter for which details of such
turnover of all the recipients are available, previous to the month during
which credit is to be distributed;
(b) the
expression “recipient of credit” means the supplier of goods or services or
both having the same Permanent Account Number as that of the Input Service
Distributor;
(c) the term ‘turnover’, in relation to any registered person engaged in the
supply of taxable goods as well as goods not taxable under this Act, means the
value of turnover, reduced by the amount of any duty or tax levied
1[under entries 84
and 92A]
[helldod
old[under entry
84]helldod] of List I of the Seventh Schedule to the Constitution and entry 51 and 54 of
List II of the said Schedule.