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

Under Section 20(2) of the CGST Act, 2017, the ISD distributes the credit of central or integrated tax in respect of reverse-charge services paid by a distinct person. Which condition does the section place on that distinct person?

The distinct person must be registered in the same State as the Input Service Distributor. Section 20(2) allows the ISD to distribute credit of central or integrated tax on reverse-charge services only where such tax was paid by a same-State distinct person.

  1. AThe distinct person must be registered in the same State as the ISDCorrect
  2. BThe distinct person must be registered in a different State
  3. CThe distinct person must be unregistered
  4. DThe distinct person must be a composition taxpayer

Explanation

Section 20(2) refers to tax paid by a distinct person registered in the same State as the ISD. A different State, unregistered or composition status is not what the section provides.

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