ISD Registration Now Mandatory: What Businesses Need to Know Before April 1, 2025
Would you like to register as ISD? Earlier, businesses had the option to choose whether to register as ISD or not, but now it has been made mandatory by the government from April 1. All companies must register as ISD.
Goods and Services Tax (GST) rules are set to undergo a significant change from April 1, 2025. Input Service Distributor (ISD) registration has been made mandatory by the government for distribution of input tax credit (ITC).
Let us tell you, this new rule will affect those businesses which have multiple GST registrations under the same PAN.
Know what is ISD?
Actually, ISD is an office which distributes Input Tax Credit (ITC) to its various offices or branches. This is useful for businesses that have centralized purchasing or services.
Let us inform you, through ISD registration, businesses can efficiently distribute ITC, as well as ensure compliance.
The government believes that making ISD registration mandatory will bring transparency and efficiency in the ITC distribution process.
This will not only prevent tax evasion but will also help in improving GST compliance.
Also let us tell you that this new rule has been implemented through amendment in the GST Act, 2017.
Which businesses may be affected?
This new rule will apply to all businesses that have multiple GST registrations under the same PAN. These include large corporations, other businesses and multi-state companies that have multiple branches or offices.
Along with this, the government has also issued a detailed guideline to the businesses to provide guidance regarding the ISD registration process.
Some advice for businesses
Businesses have been advised by the government to register as ISD before the deadline of April 1, 2025. This will help them avoid last-minute rush and ensure a smooth transition.
Disclaimer:
This article is for informational purposes only and does not constitute legal or financial advice.
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