Purpose of Input Service Distributor :
A supplier of goods and services may have head office/regional office at different place/s. The services may be received at head office/regional office, but ultimately, these services will be indirectly used for manufacture or providing output service.
Provision has been made to avail input credit of services received and paid for at head office/regional office. Such head office/regional office can be registered under GST as ‘Input Service Distributor’ and it can issue invoice on its branches/factories/depots.
If assessee intends to use the facility, he has to register under GST.
“Input Service Distributor” means an office of the supplier of goods and/or services which receives tax invoices issued under section 31 of CGST Act towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of CGST (SGST in State Acts) and/or IGST paid on the said services to a supplier of taxable goods and/or services or both having same PAN as that of the said office – section 2(61) of CGST Act.