Transitional provisions Of  Input Service Distributor (ISD):

As for the transition of input credit lying with the ISDs in the existing regime to GST, relevant Sections in the MGL are Sections 143 and 162.

Section 143 of the MGL provides that the amount of CENVAT Credit carried forward in a return furnished under the earlier law by an assessee would be allowed as input tax credit in the GST regime.

Section 162 of the MGL provides that input tax credit on account of any services received prior to the appointed day by an ISD shall be eligible for distribution as credit even if the related invoices are received on or after the appointed day, that is the day when GST would get implemented. It is important to note that the transition of ISD
credit is with respect to CGST only.

Section 162 of the MGL provides for distribution of credit for such services only which were received prior to the appointed day but invoices are received later. That means the credit for such services was not booked prior to the appointed day, and it will be booked in the GST regime for the first time. Thus no carrying over of documentation etc. would be required. The MGL does not provide any time limit for taking such credit either.

It may be noted that Section 162 of the MGL does not take care of the credit which is lying in the books of an ISD on the appointed day. This has been taken care of by Section 143 of the MGL which is a general transition provision for all types of credit, and would apply to ISD as well because the ISD credit is also carried forward in a return which is filed by ISD under the existing law, and the related procedure may be used for transition of ISD credit also.