ISD vs. Cross Charge with Valuation in GST || CA (Adv) Bimal Jain

[@vvguthe1]

Very nicely explained concept of cross charge and ISD. The GST act no where mentions about cross charge. So it was difficult to understand what is the concept of cross charge especially for those who had no background of service tax practice previously. You have explained it with examples very properly. The circular number 199 of 2023 is also explained very well. Thank you sir

[@prasadnilugal4691]

Very very nice information Sir , Also explain very well as usual .

[@ketanagarwal8579]

In case, the HO distributes or wishes to distribute ITC to BOs in respect of such common input services through the ISD mechanism as per the provisions of section 20 of CGST Act read with rule 39 of the CGST Rules, HO is required to get itself registered mandatorily as an ISD in accordance with Section 24(viii) of the CGST Act. Further, such distribution of the ITC in respect a common input services procured from a third party can be made by the HO to a BO through ISD mechanism only if the said input services are attributable to the said BO or have actually been provided to the said BO. Word used in the circular wishes that it will be mandatory isd registration for distribution of common input tax credit or not?

[@pardeepkaushik9900]

Sir, means a HO can now survive without ISD registration?

[@prateekjain4324]

We are allocating the common input services by the way of cross charge the locations and paying the GST as well. Do we continue to follow the same or ISD is required ?

[@darshansancheti7923]

Can open market value be taken as nil for transfer of goods from HO to branch in case my of restaurant services where ITC is not available

[@cabimaljain]

no

[@katravathramchandar1279]

need clarificatio on cross charge mechanism

[@travelshorts247]

Sir a interpretation doubt, how I am interpreting this circular is, there is no restriction as when ISD Route is to be chosen or when Cross Charge Route. I think still this choice is freely available. Response from your end on this interpretation will be helpful.

[@cabimaljain]

Difference lies on Common Input Services vs. Input Service...pls read Circular

[@sanchitjain5475]

Sir it is clearly mentioned in point 1 that HO has an option distribute the common input services, which is attributable to both HO and BO, through ISD mechanism. And the same can be distributed by issuing tax invoices u/s 31 by HO to BO.

[@travelshorts247]

@@cabimaljain Sir if such a restriction exists, why the paragraph 2 of S. No. 1 Clarification of the circular will begin with, "wishes to distribute through ISD", if compulsion is there, there is no wish left for common Input services. Also to further support my argument, in last paragraph S. No. 1 Clarification, it means to say, invoice using cross charge can only be issued if services is actually used by BO and not to be interpreted as cross charge can only be made if supply is exclusively received for BOs. The intention of usage of Common Input Services before ISD is only because of the fact that, ISD can distribute input of that only and not to make any restriction on usage of any mechanism. Your response will be really helpful.

[@bishanseal3647]

​@@cabimaljain Sir in case of common input of services acquired from 3rd parties, in case of hotels where some reversal of common credit is required at hotel level due to non gst sales (alcohol), should we still go for isd.

[@punitkumar5581]

Thanks for valuable explanation! need more clarification on provisional expenses to be covered under valuation of taxable under cross charge Invoicing?

[@ram_Srikaram]

It is really a good and simple explanation sir thank u ❤❤

[@OfficeofCAAkshayTambe]

Thank you CA Bimal Sir for your extremely useful videos on GST and other useful topics. Sir , what would be the poistion in case of Partially allowable ITC. The circular clarifies the issues for Fully allowable ITC Vis a vis the Fully disallowble ITC. What is the position in case of partially allowable ITC ??

[@archnagupta6239]

As always the circular is very well explained. I have one doubt, if HO raises tax invoice on BO for services availed from third party in respect of a single branch, can HO avail ITC on invoice raised by third party on HO as the actual service is not received by HO

[@cabimaljain]

No

[@sanchitjain5475]

Sir, if HO won’t avail ITC in respect of input services procured by them on behalf of a single branch then how can HO distribute the same to the concerned BO by issuing tax invoice. Also there will be no restriction on eligibility of such ITC as the HO being a recipient of service

[@cabimaljain]

@@sanchitjain5475 - Indeed, credit available for distribution either as ISD or Cross charge provided registered either as ISD or Cross charge (normal registration)...given reply in different context...hopefully, now clear

[@ketanagarwal8579]

2. If any common input tax credit received by branch on behalf of head office or common credit procure by branch but attributable for head office and branch both This circular will be applicable or not?

[@subakesavan6632]

Thanks sir for your wonderful explanation

[@ChetanExplains]

Sir, how to interpret the full itc - qua transaction or qua recipient?

[@cabimaljain]

both

[@ChetanExplains]

@@cabimaljain thnx for the response. Any precedent or reference for this?

[@sanjeevmadan3514]

I was looking for the solutions to these queries for the last over 2 years. Thank you Sir for clarifying this very important issue ...

[@swarajthakur4139]

Please Hindi use kro sir