Collect the month's shared invoices
Pull every input service invoice received by the ISD, with its GSTIN, date, value and tax.
GSTR-6 · Input service distributor
GSTR-6 explained: passing shared input credit from head office to branches
GSTR-6 is the monthly return for an input service distributor (ISD), the office that receives invoices for shared services and passes the GST credit down to the branches that use them. It is how a business with several units gets credit on central costs such as head-office support. This guide explains what the ISD can distribute, how the ISD invoice works, and the errors that stop credit reaching the right branch.
Last reviewed 17 October 2026 · Independent guidance, not a government service
01 / The basics
What an input service distributor does
Many businesses pay for shared services at one location: head-office management, IT, legal or marketing support that serves the whole group. The GST on those invoices lands with the central office, but the branches are the ones that make the taxable supplies. The ISD mechanism lets the credit follow the use.
The ISD does not make sales of its own in this role. It receives the credit on the input services and distributes it, by invoice, to the branches that should benefit. The return then shows what came in and what went out, so the flow of credit can be traced.
Distribution follows the rules.
The ISD can only pass on the credit the rules allow, so an over-distribution creates a problem for the branch that claimed it.
02 / What GSTR-6 reports
The contents of the return
| Part | What it records | Why it matters |
|---|---|---|
| Credit received | Input tax on input services invoiced to the ISD | The pool of credit available to distribute |
| Credit distributed | ISD invoices and credit notes issued to branches | Shows the credit each branch can claim |
| Amendments | Corrections to earlier distributions | Keeps the branches' claims accurate |
| Tax paid | Any tax or interest arising from the ISD | Settles the position for the period |
Each distribution needs a matching entry in the recipient branch's records. If the two sides do not agree, the branch's claim is vulnerable, even when the ISD's return is correct.
03 / Distributing credit
How the credit is passed to branches
- 01
Identify shared input services
Separate the invoices for services used across branches from those used only by the head office or only by one branch.
- 02
Allocate by the rules
Distribute credit to each eligible branch using the allocation basis set out in the rules, and keep the working.
- 03
Issue the ISD invoice
Create an ISD invoice or credit note for each recipient branch, showing the credit distributed and the branch's GSTIN.
- 04
File GSTR-6
Report the credit received and distributed for the month, and check it agrees with the invoices issued.
- 05
Branches claim in GSTR-3B
Each branch claims the credit in its own return, subject to its usual conditions, and reconciles it to GSTR-2B.
04 / A monthly routine
A simple monthly routine
Agree the allocation
Agree with the branches which costs they bear and how the credit is split, before the invoices are issued.
Issue, file and tell the branches
Issue the ISD invoices, file the return by the 13th and let each branch know the amount to claim.
Set the allocation policy in advance.
A written allocation basis makes the distribution defensible. Changing the split after the fact is where most queries start.
05 / Avoid these
Common GSTR-6 mistakes
Distributing credit on goods
Goods credit is outside the ISD scheme. Distributing it creates a claim the branch cannot defend.
Mismatched ISD invoices
An ISD invoice that does not match the branch's GSTIN or the amount in the return causes a mismatch in the branch's GSTR-2B.
Late filing
A late GSTR-6 delays the branches' claims, and attracts a late fee and interest on any tax due.
Ignoring blocked credit
Blocked credit must not be distributed. Check each invoice against the blocked categories before allocating.
Questions people ask
Frequently asked questions
What is GSTR-6?
GSTR-6 is the monthly return filed by an input service distributor (ISD). An ISD is an office of a business that receives invoices for input services, such as head office support, centrally paid for the whole group, and distributes the input tax credit to the branches that use those services. GSTR-6 reports the credit received and the credit distributed in the period.
Who has to register as an ISD?
A business that receives invoices for input services used by its branches needs to register as an ISD to distribute that credit. Registration as an ISD is compulsory for an ISD under the GST law, and it is separate from the registration each branch holds. Check the rules for your structure before you register.
What can an ISD distribute?
An ISD can distribute only the input tax credit on input services, not on goods, and only in the proportion set by the rules. Credit on goods, or credit that is blocked, cannot be distributed, and the distribution must be to registered branches of the same business.
How does the ISD pass credit to branches?
The ISD issues an ISD invoice or an ISD credit note to each recipient branch, showing the amount of credit distributed. The recipient branch then claims this credit in its own GSTR-3B, subject to its usual ITC conditions. The records of the distribution have to match the ISD's return.
When is GSTR-6 due?
GSTR-6 is generally due by the 13th of the month after the period. Confirm the current due date on the GST portal, because dates can be changed by notification.
Can an ISD claim credit for goods?
Credit on goods is not within the ISD distribution scheme. Goods purchased for the business are claimed by the business that receives them, and the ISD mechanism applies only to the input services that serve several branches.
What is the late fee for GSTR-6?
A daily late fee applies to a late GSTR-6, with a cap, and interest applies to any tax paid late. Check the current amounts on the portal because they can change, and any waiver is announced by notification.
What is the difference between ISD and a normal branch?
A normal branch files its own returns and claims its own input credit. An ISD is the central office that receives the credit for shared services and passes it on. Both need separate registrations where the rules require, so the structure should be set up before the credit is distributed.
Can an ISD distribute credit to a branch in another state?
Yes. The distribution is made to branches across states, which is one of the main purposes of the ISD mechanism, since head-office services often serve branches in several places. The ISD invoice indicates the location of the recipient branch.
Is this page an official service?
No. GSTVibe is an independent guide and is not affiliated with GSTN or the tax department. We do not register businesses or file ISD returns. Confirm the rules on the GST portal and speak to an adviser before setting up an ISD structure.
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This guide is informational and is not legal or tax advice. GST rules, forms and portal steps change. Confirm the current position on the official GST portal (gst.gov.in) and CBIC sources, and speak to a qualified adviser about your own facts. GSTVibe is not affiliated with GSTN or the tax department.