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CS Executive · Tax Laws and Practice · Input Tax Credit and Computation of GST Liability

Under Section 20 of the CGST Act, 2017, which invoice-related credit can an Input Service Distributor distribute in addition to credit on ordinary tax invoices for input services?

An ISD can also distribute credit on input services taxed under reverse charge, under section 9(3) or 9(4) of the CGST Act or section 5(3) or 5(4) of the IGST Act. Sections 20(1) and 20(2) expressly include these, with conditions as prescribed.

  1. ACredit on services liable to tax under sub-section (3) or (4) of section 9 (reverse charge), including IGST equivalentsCorrect
  2. BCredit on goods purchased for resale
  3. CCredit on invoices from composition suppliers
  4. DCredit on exempt supplies made by the ISD

Explanation

Sections 20(1) and 20(2) expressly include invoices and credit for services taxed under section 9(3) or 9(4) (and the IGST counterpart in section 5(3) or 5(4)). The other options are not mentioned in the section.

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