Under GST regime, head office of a company is treated as a distinct person requiring separate registration as input service distributor (ISD) if it intends to distribute the credit. In such a case, separate return is being prescribed in form GSTR-6 which is supposed to be filed monthly between the 10th to 13th of subsequent month. The invoices on which ITC is distributed by the ISD are filed by it in GSTR-6. These details will auto-populate in form GSTR-2A of the recipient unit, which when accepted will be included in GSTR-2.
While GST is in its transitional phase as of now, there is no utility of GSTR-6, neither online nor offline. Therefore, ISDs are not able to file the GSTR-6. Thus, these details cannot auto-populate in the part B of form GSTR-2A of recipient of credit. Therefore, these details are to be manually filed in FORM GSTR-2. There is no clarity on the issue whether these details will be reflected in GSTR-6A of the ISD? If not, how the track of correct distribution will be kept?
Further, format of form GSTR-6A as given in CGST Rules, 2017 does not cover any such case. It simply covers the details of "Input tax credit received for distribution" and "Debit / Credit notes (including amendments thereof) received during current tax period". Thus, it appears that the is no provision for acceptance of details manually submitted in GSTR-2 by recipient of distributed ITC.
Under current scenario, when the utility of GSTR-6 is not available and GSTR-2 are in process of filing and in some cases already filed, the above stated anomalies have serious effects. If the option of availing the ITC through manual filing in GSTR-2 is not given, whether the ITC legitimately available will lapse? If this facility is provided, how the correlation of ITC at ISD's end will be possible? This problem will particularly arise where the number of recipient units is on higher side. More the recipient units, more are the chances of errors. Suppose, the manual submission by recipient unit is allowed in GSTR-2 and the ISD return is not filed and the recipient unit I, III and IV showed the correct amounts; but unit II showed an incorrect amount. In such a case, what will be the mechanism to trace the errors and rectify the same.
An overview of GSTR-6 and 6A shows that the proper mechanism is there to correlate the amount of tax shown in supplier's invoices with the ITC distributed by the ISD; however, we could not trace a similar mechanism for manual submission of details of ITC by the recipient. Therefore, the doubts raised in forgoing paras will remain the doubt until the online or offline utility of GSTR-6 and GSTR-6A is made available.
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