Section 20. Manner of
distribution of credit by Input Service Distributor.-
(1) The Input Service
Distributor shall distribute the credit of central tax as central tax or
integrated tax and integrated tax as integrated tax or central tax, by way of
issue of a document containing the amount of input tax credit being distributed
in such manner as may be prescribed.
(2) The Input Service
Distributor may distribute the credit subject to the following conditions,
namely:-
(a) the credit can be
distributed to the recipients of credit against a document containing such
details as may be prescribed;
(b) the amount of the
credit distributed shall not exceed the amount of credit available for
distribution;
(c) the credit of tax
paid on input services attributable to a recipient of credit shall be
distributed only to that recipient;
(d) the credit of tax
paid on input services attributable to more than one recipient of credit shall
be distributed amongst such recipients to whom the input service is
attributable and such distribution shall be pro rata on the basis of the
turnover in a State or turnover in a Union territory of such recipient, during
the relevant period, to the aggregate of the turnover of all such recipients to
whom such input service is attributable and which are operational in the
current year, during the said relevant period;
(e) the credit of tax
paid on input services attributable to all recipients of credit shall be
distributed amongst such recipients and such distribution shall be pro rata on
the basis of the turnover in a State or turnover in a Union territory of such
recipient, during the relevant period, to the aggregate of the turnover of all
recipients and which are operational in the current year, during the said
relevant period.
Explanation.- For the
purposes of this section,-
(a) the
"relevant period" shall be-
(i) if the recipients
of credit have turnover in their States or Union territories in the financial
year preceding the year during which credit is to be distributed, the said
financial year; or
(ii) if some or all
recipients of the credit do not have any turnover in their States or Union
territories in the financial year preceding the year during which the credit is
to be distributed, the last quarter for which details of such turnover of all
the recipients are available, previous to the month during which credit is to
be distributed;
(b) the expression
"recipient of credit" means the supplier of goods or services or both
having the same Permanent Account Number as that of the Input Service
Distributor;
(c) the term
"turnover", in relation to any registered person engaged in the
supply of taxable goods as well as goods not taxable under this Act, means the
value of turnover, reduced by the amount of any duty or tax levied 1[under
entries 84 and 92A] of List I of the Seventh Schedule to the Constitution and entries
51 and 54 of List II of the said Schedule.
