Multi-state companies must register as ISD by April 1, 2025

The arrangement for sharing of ITC is prescribed in the GST rules and broadly the common ITC is divided in proportion to the turnover of different branches having the same PAN. The Central Board of Indirect Taxes and Customs (CBIC) has now notified April 1, 2025 as the cut-off date for all companies with multi-state branches to register as ISDs.

Companies with presence in multiple states and distributing common input tax credit with branch offices will have to register as Input Service Distributors (ISD) with the GST authorities by April 1, 2025.

Amendment in GST law

The government amended the Goods and Services Tax (GST) law through the Finance Bill 2024 in February, saying that businesses with multi-state GST registrations will have to mandatorily register themselves as ISDs to distribute any input tax credit (ITC) for services received among their branches.

The arrangement for sharing of ITC is prescribed in the GST rules and broadly the normal ITC is divided in proportion to the turnover of different branches having the same PAN. The Central Board of Indirect Taxes and Customs (CBIC) has now notified April 1, 2025 as the cut-off date for all companies with multi-state branches to register as ISD.