10 Points to Consider Before Filing GSTR 6
At the point when a business comes into existence, the mind behind the endeavor starts to dream of a future. Nonetheless, as the business grows, the intricacy of the compliance around it likewise develops. By and by, to promote the growth of businesses in India, numerous provisions have been brought under the GST system.
One such provision is Input Service Distributor (ISD) adopted from the Service Tax Regime. An ISD guarantees that the regular use and billings divided among an association’s branches/sub-units are unified. Moreover, the utilization of this idea additionally improves the ITC claiming cycle and improves the credit cycle as well. To stay GST compliant an Input Service Distributor (ISD) needs to file GSTR 6 on or before the 13th of the succeeding month. So, in this blog, we will reveal 10 points that you should consider before filing GSTR-6.
10 Points to Consider Before Filing GSTR 6
- To distribute the ITC to the recipients, the given taxpayer needs to enroll as an Input Service Distributor (ISD).
- An ISD has 2 essential jobs,
- To centralize billing for the regular expenses acquired on input tax.
- To distribute the tax credit of CGST and SGST/ UTGST or IGST paid to the recipient.
- The ISD can disperse the ITC just to its branches enrolled under the same PAN (however the GSTIN can differ).
- The ISD can not circulate the Input Service Distributor (ISD) for service used by a service provider or outsource enterprises.
- The ISD should not distribute ITC surpassing the tax sum paid for the services.
- The ISD is not available on the ITC paid on the Input products, like raw material or capital goods.
- ISD and a normal taxpayer both have purchase invoices but an Input Service Distributor cannot claim ITC on the tax paid on services.
- A normal taxpayer needs to file GSTR 3B, on which he/she furnishes the details regarding ITC. However, the ISDs do not need to file GSTR 3B as they don’t have any credits of their own.
- ISD needs to mandatorily file GSTR-6 regardless of whether it is a nil return.
- GSTR 6A is an auto-generated form through the invoices, CDNs (credit or debit notes) furnished by the sellers in their GSTR-1.
