00:00The Indian government has made a big change in the rules of Goods and Service Tax, i.e. GST.
00:11From April 2025, the Input Service Distributor, i.e. ISD system is going to be implemented.
00:17With the help of this system, the state governments will collect equal amounts of tax on the shared services provided at the same place.
00:26According to experts, the aim of this change is to guarantee the correct distribution of tax revenue among states.
00:33So let's tell you in detail in this video what is the Input Service Distributor and what will be the difference in the taxation system.
00:42For the ISD mechanism, under the Finance Act No. 1 of 2024, an amendment has been made in the CGST Act.
00:50This mechanism allows businesses operating in many states to centralize the invoices of common input services in a branch or headquarter.
01:01This gives equal distribution of related input tax credit among the branches using these shared services.
01:11Input Tax Credit, i.e. ITC. ITC is the tax paid on the purchase of a business, which can be reduced while paying tax on Input Tax.
01:22By using Input Tax Credit, the GST liability for the product or service sold by the registered individual decreases.
01:32Before this, businesses had the option of using the ISD mechanism or cross-charge method to allot common ITC to their other GST registrations.
01:44If the ISD mechanism is not used, ITC will not be given for recipient location.
01:51On the wrong distribution of ITC, the tax authorities collect the amount from the recipient location along with the interest.
01:58And for irregular ITC distribution, the amount of ITC or Rs. 10,000, whatever is more, will have to be fined.
02:07In the meantime, let me tell you another news that from April 1, this change is already taking place in GST.
02:13In addition, food can be a little expensive in the hotel restaurant.
02:17For a hotel with a room rent of less than Rs. 7500 from April 1, with 18% GST, the facility of taking Input Tax Credit, i.e. ITC, will be available.
02:28The hotel where the room rent is less than Rs. 7500, 5% GST is required to eat in the restaurant there.
02:36If this hotel accepts the facility of ITC with 18% GST, then food will become expensive in the restaurant here.
02:43From April 1, 12% instead of 18% GST will be applied on the sale of old, normal and electric cars.
02:51At the same time, this rule will apply for agencies that sell second-hand cars.
02:56So what is your opinion on this new rule of GST?
02:59Give us your opinion in the comment box and keep watching Good Returns for such updates.
03:03Don't forget to like and subscribe to our channel.
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