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Understanding GSTR 6: Monthly Return for Input Service Distributors

GSTR 6 is a mandatory monthly GST return for Input Service Distributors (ISDs) to detail and distribute Input Tax Credit (ITC) from received services. The return, comprising eleven sections, ensures proper allocation of credit among various business units. Although direct revisions are not permitted, errors can be corrected in subsequent month's filings. Significant recent updates have made ISD provisions mandatory and streamlined ITC allocation methods.

📖 2 min read read🏷️ GSTR 6

Latest Updates on GSTR 6 Information

A significant update on June 7th, 2025, from GSTN introduced a restriction preventing taxpayers from filing GSTR-3B after three years from its original due date. This change will be implemented on the GST portal starting with the July 2025 tax period. Furthermore, Notification No. 16/2024-Central Tax, issued on August 6th, 2024, amended Sections 2(61) and 20 of the CGST Act, 2017. Previously optional, the Input Service Distributor (ISD) mechanism is now mandatory, effective from April 1st, 2025. Additionally, Notification No. 12/2024-Central Tax on July 10th, 2024, saw the CBIC revise Rule 39 of the CGST Rules, 2017, outlining a new method for ISDs to allocate Input Tax Credit (ITC), though this procedure is still awaiting official notification.

What is GSTR 6?

GSTR 6 functions as a distinct monthly return, mandatory for Input Service Distributors (ISDs). This return details the Input Tax Credit (ITC) received by an ISD and subsequently its distribution. The GSTR 6 form comprises a total of eleven distinct sections.

Why is GSTR 6 Important?

GSTR 6 holds importance because it itemizes all documentation associated with Input Tax Credit (ITC) distribution, outlining the method of credit allocation and the specific tax invoices linked to received credit. All ISDs are required to file GSTR 6, even if no transactions occurred, necessitating a nil return.

GSTR 6 Due Date

The GSTR 6 filing deadline is the 13th day of the month succeeding the applicable tax period. Penalties for late submissions have been lowered to Rs. 50 per day. It is important to note that no late fee reduction applies when filing a nil return.

Who Must File GSTR 6?

Every entity operating as an Input Service Distributor (ISD) is mandated to file GSTR 6.

How to Correct GSTR 6 Errors?

Under the GST framework, no direct revision facility exists for GSTR 6. Errors identified in a filed return must be rectified in the GSTR 6 submission for the subsequent month.

What is GSTR 6A?

GSTR 6A is an auto-populated statement generated from the information submitted by an Input Service Distributor's (ISD) suppliers in their GSTR 1 returns. This form is strictly read-only, and any necessary modifications cannot be made directly to GSTR 6A; instead, they must be incorporated during the filing of GSTR 6. Taxpayers are not required to file GSTR 6A themselves, as it serves purely as a view-only document, accessible via the Return Dashboard on the GST Portal under the ‘PREPARE ONLINE’ option for the GSTR 6A tile.

Details Required in GSTR 6

Once an Input Service Distributor (ISD) has reviewed, modified, or approved the auto-populated details in GSTR 6A, they proceed to file GSTR 6. Consequently, a significant portion of GSTR 6 data is automatically populated based on the accepted GSTR 6A entries. The following outlines the key sections where information must be provided:

GSTIN

The Goods and Services Tax Identification Number (GSTIN) of the dealer for whom the return is being submitted must be entered.

Name of the Registered Person

The registered taxpayer's name will automatically appear in this section.

Input Tax Credit Received for Distribution

This section is auto-populated with invoice-level specifics of all received inputs that are designated for Input Tax Credit (ITC) distribution.

Total, Eligible, and Ineligible ITC for Distribution

This segment presents the total Input Tax Credit (ITC) for the Input Service Distributor, categorized into the overall ITC amount, eligible ITC, and ineligible ITC for the tax period.

Distribution of Input Tax Credit

Within this table, the ISD provides a complete report of the ITC distribution. The information here enables the dealers receiving the credit to subsequently claim their respective ITC.

Amendments to Previous Returns

Errors in invoice details for inward supplies reported in previous returns can be corrected in this section. All necessary adjustments to invoices must be recorded here.

Input Tax Credit Mismatches and Reclaims

Adjustments to the overall Input Tax Credit (ITC) resulting from mismatches or reclaims due to rectified mismatches are managed within this table.

Adjustments to Distributed ITC

Modifications to the credit amount distributed to dealers, based on the details provided in Tables 6 or 7, are made in this section.

Redistribution of Incorrectly Allocated ITC

This table is used to record any instances where Input Tax Credit (ITC) was incorrectly distributed to recipients in earlier returns.

Late Fees

Any applicable late fees paid by the dealer must be declared in this section.

Refund Claimed from Electronic Cash Ledger

This section contains information regarding refunds requested from the electronic cash ledger.

Frequently Asked Questions

What is the primary purpose of an Input Service Distributor (ISD) under GST?
The main purpose of an ISD is to receive invoices for input services used by multiple branches of an organization and then distribute the Input Tax Credit (ITC) on these services to its various units, rather than claiming it at a single point.
How does the Goods and Services Tax Identification Number (GSTIN) function for an ISD?
An ISD must obtain a separate GSTIN unique to its ISD registration, distinct from the GSTIN used for its regular business operations, to specifically handle the distribution of input service credit.
Can an ISD claim Input Tax Credit (ITC) on all received services?
An ISD can claim and distribute ITC only on 'input services.' It cannot distribute ITC on goods or capital goods, and only eligible ITC as per GST law can be passed on to recipient units.
What are the consequences of failing to file GSTR 6 by the due date?
Failure to file GSTR 6 by the due date incurs a late fee of Rs. 50 per day (Rs. 25 CGST + Rs. 25 SGST) until the return is filed, with no provision for reduction for nil returns.
Is it possible for an ISD to distribute credit to multiple distinct business entities?
Yes, an ISD is specifically designed to distribute eligible ITC among its various distinct business entities (e.g., branches with separate GSTINs) that have consumed the input services, proportionally based on their turnover.