Tax Invoice for an Input Service Distributor (ISD):
a. An Input Service Distributor (ISD) is entitled to distribute credits in terms of Section 20 of the Act read with Rule 39 of the CGST Rules, 2017. For the purpose of such credit distribution, an ISD Invoice is required to be issued by an ISD (or a credit note where the credit distributed earlier is to be reduced for any reason), and such document is required to contain all the particulars specified in Rule 54(1) of the CGST Rules, 2017.
b. An exception has been carved out for an ISD of a banking company or a financial institution, including a NBFC, wherein the document issued for distribution may or not may not be serially numbered, but must contain all the details as prescribed.
c. The law provides that a registered person having the same PAN and State code as that of the ISD, may issue an invoice or, as the case may be, a credit or debit note to transfer the credit of common input services to the ISD (wherein the taxable value shall be the same as the value of the common services), containing the details specified in Rule 54(1A). It may be noted that the said sub-rule has been inserted vide Notification No. 03/2018 dated 23.01.2018. By virtue of this provision, certain loopholes of the ISD provisions have been plugged. E.g. Where a common service is liable to tax under reverse charge basis, another registration in the same State can discharge the liability and pass on such details to the ISD for distribution, considering the an ISD is incapable of discharging any tax liability.