ISD Full Form in GST

What is The Full Form of ISD in GST?

ISD full form in GST is Input Service Distributor. The term “input service distributor” (ISD) refers to a supplier of taxable products & services or both who shares the same PAN as the ISD and whose headquarters receive tax receipts for the payout of input services in addition to issuing a given a prescription report to disperse the credit of central tax, state tax, union territory tax, or integrated taxes collected on specific services. Keep in mind that the ISD mechanism is only designed to provide credits on shared bills for input services, not for the distribution of commodities (inputs or even capital goods).

Companies are allowed to have a single site for their main office and other, independently registered operations elsewhere. The Head Office would buy certain services to be used by all units around the country. Bills for such expenditures would be delivered to the corporate headquarters. However, in order to utilize the credit that accrues as a consequence of these input services, the Corporate Headquarters would not be engaging in the independent production of any output supply. Given that the collective spending is meant to support the activities of all units, the credit paid on inputs pertaining to such pooled invoices must naturally be distributed among all consumption units. The ISD mechanism enables this fair allocation of credit paid on inputs across all consuming units.