(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 under
entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and
54 of List II of the said Schedule