In GST, the concept of input service distributor was introduced to streamline the distribution of credits under a centralized system from the main office to various branches or offices of the business entity. As per rule 39 of CGST, the input service distributor is required to file a monthly return in form GSTR-6. The return includes information of inward supplies and purchases made, the input tax credit received by the input tax distributor and the input tax dispersed among the branches by him. It is a mandatory return, and a nil return has to be filed even when there is no input tax credit to be reported.
Input Service Distributor (ISD)
Input service distributor is appointed by a business entity to distribute the input tax credit. The ISD is required to register in GST and file the monthly GSTR-6 return within the due date. He distributes credit under SGST/CGST/IGST to all the branches of the business with the same PAN. GSTIN may or may not be the same, but they must be under the same PAN. The ITC paid on goods like raw materials and capital goods are not eligible for distribution in ISD mechanism.
What is GSTR-6?
Input service distributors registered under GST are required to file GSTR-6 every month within the due date specified. Late filing and non-filing will result in late fees and other penalties. Composite tax payers, non-resident taxpayers, suppliers of OIDAR, compounding taxable person, taxpayers liable to collect TDS/TCS are excluded from filing this return. It can be filed online by logging in to the GST portal and entering the relevant details in the tables provided for the same. The portal also provides an offline tool to file the return. It can also be filed through a tax facilitation center.
Due Dates for Filing GSTR-6
The due date for filing GSTR-6 is the 13th of the subsequent month. For example, the return for the month of September 2023 has to be filed within 13th October 2023.
Late Fees and Penalties
If the GSTR-6 is not filed within the due date, a late fee of Rs.50/-per day and no fees for late filing of Nil Returns, subject to a maximum of Rs.2000/- is applicable.
Important Points to Consider before Filing GSTR-6
The taxpayer must be registered as an input service distributor, and have an active GSTIN.
- The taxpayer must have valid login credentials, that is user id and password to login to the GST portal.
- The taxpayer must have valid non-expired/unrevoked digital signature or electronic verification certificate to authenticate the return filed.
- The taxpayer must have an active mobile number which is updated in the portal at the time of registration or amended. This is needed for authentication through EVC.
- It is a mandatory and must be filed every month within the 13th of the following month.
- If there is no input distribution for a particular month, a nil return has to be filed.
- The return contains details of the input credit received and its distribution by the input service distributor.
- It can be filed online on the GST portal by logging in with the valid user id and password of the ISD. There is also an offline mode on the portal for the taxpayers. It can also be filed through a tax facilitation center.
- For cancelled GSTINs, taxpayers must file the return for the period in which it was active.
- It must be filed by the 13th of the succeeding month of the tax period and late filing; non-filing will result in late fees.
Filing GSTR-6-Step by Step Guide
After registering on the GST portal, the input tax distributor gets the user id and password which the ISD can use to login and file the GSTR-6. It involves the following steps:
- Step 1- Login to GST Portal: The first step is to login and navigate to the returns dashboard and select GSTR-6. The return for input service distributor-GSTR-6 page is displayed.
- Step 2- Enter the details in the tiles provided: There are three sub-heads representing tables to enter the relevant details. The taxpayer has to click on the tile names to know and enter the details. The three sub-heads are:
- Form GSTR-6 Invoice Details
Table 3-Input Tax Credit Received for Distribution: Taxpayer has to enter details of input tax credit received for distribution.
To view or edit the input tax credit received for distribution, the taxpayer has to click on ‘3-input tax credit received for distribution’ tile. Details like supplier’s GSTIN, name are auto populated, but invoice no., date, POS, total invoice value, and supply type needs to be provided by the user. There in the ‘Add missing invoice details’ and edit the details as needed.
Table 4- Total ITC Available and Eligible/ Ineligible ITC Distributed: Taxpayer can view details of ITC available and eligible and ineligible ITC distributed. The details are auto populated from the details filed by the counter party in their GSTR-1 and GSTR-5.
- Form GSTR-6-ITC Distribution:
Table 5- Distribution of Input Tax Credit (ISD Invoices & ISD Credit Notes): All eligible and ineligible credit separate from the total ITC, that is available, CGST/IGST/SGST wise is to be furnished. Taxpayer has to enter the details of distribution of input tax credit for ISD invoices and ISD credit notes.
Table 6A-Amendment of Information Furnished in Table 3 of Earlier Returns: Taxpayer has to enter the details of amendments made to information pertaining to table 3 of earlier returns.
Table 6B-Credit Notes/ Debit Notes Received: Taxpayer has to enter the details of credit or debit notes received.
Table 6C- Amendment of Credit Notes/Debit Notes Received: Taxpayer has to enter the details of credit or debit notes received.
In amendment tables, the revised invoices/debit/credit notes should be dated on or after the date of grant of registration of ISD as well as supplier and before the effective date of cancellation of registration of supplier.
Table 7-Amendments in Documents and Credit/Debit Notes of Previous Tax Periods: Any changes in the documents and credit/debit notes of previous tax periods must be reported in this table.
Table 8-Mismatch of ITC to be Distributed during the Tax Period and Reclaims: In this table, reversals and reclaims to be allocated among the recipient’s tax wise.
Table 9- Redistribution of ITC Distributed in Earlier Returns: Taxpayer has To enter details of ITC available and eligible and ineligible ITC redistributed. All the details of original distribution documents and the details of redistribution documents to be specified recipient wise and invoice wise.
- Step 3-File Form GSTR-6
- Step 4-View the Consolidated Summary: Then the taxpayer has to click ‘Generate GSTR-6 Summary’. The summary of the return is generated. The taxpayer has to check and ensure that the details shown are correct.
- Step 5-Late Fee
GSTR-6 – Other Details:
Table 10-Late Fee: Taxpayer can view the late fee details on account of CGST/IGST/SGST for the period to be furnished mandatorily. This tile can be accessed only after the return has been filed.
- Step 6- File the Return
‘Submit’ and File Return’, the process of filing GSTR-6 returns is completed.
It is mandatory for input service distributors to file the monthlyGSTR-6 returns within the 13th of the following month, giving the details of the input tax credit received and distributed by the ISD. Late filing and non-filing will make the taxpayer liable to pay late fees and other penalties. So the input service distributors must understand the process of filing GSTR-6 thoroughly and file on time as filing this return is a major part of compliance. If it seems confusing and difficult, it is best if the ISD take the help of professional tax consultants.