Text
The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.
Section 20, verbatim (show)
Section 20
1[Section 20. Manner of distribution of credit by Input Service Distributor.-
(1) Any office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9 2[of this Act or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017], for or on behalf of distinct persons referred to in section 25, shall be required to be registered as Input Service Distributor under clause (viii) of section 24 and shall distribute the input tax credit in respect of such invoices.
(2) The Input Service Distributor shall distribute the credit of central tax or integrated tax charged on invoices received by him, including the credit of central or integrated tax in respect of services subject to levy of tax under sub-section (3) or sub-section (4) of section 9 2[of this Act or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017,] paid by a distinct person registered in the same State as the said Input Service Distributor, in such manner, within such time and subject to such restrictions and conditions as may be prescribed.
(3) The credit of central tax shall be distributed 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, in such manner as may be prescribed.]
1. Substituted (w.e.f. 01.04.2025) by s. 12 of The Finance (No. 8) Act, 2024.
2. Inserted (w.e.f. 01.04.2025) by s. 125 of The Finance (No. 7) Act, 2025.
20(1)Registration and distribution
shall be required to be registered as Input Service Distributor under clause (viii) of section 24 and shall distribute the input tax credit in respect of such invoices.Section 20(1)
The office must receive input-service invoices for or on behalf of distinct persons under section 25. The scope includes reverse-charge services under section 9(3) or (4) and Integrated Goods and Services Tax Act section 5(3) or (4). The law does not settle how invoices received "for or on behalf of" distinct persons are distinguished from the office's own-use invoices.
Questions to answer on the file7 questions
20(2)Credit and prescribed requirements
The Input Service Distributor shall distribute the credit of central tax or integrated tax charged on invoices received by himSection 20(2)
The credit includes the stated reverse-charge tax paid by a distinct person registered in the distributor's State. Distribution follows prescribed manner, timing, restrictions and conditions. Section 21 addresses distribution in contravention of section 20, so the distribution rule must be read with it.
Questions to answer on the file8 questions
20(3)Tax heads and document
The credit of central tax shall be distributed 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 creditSection 20(3)
The document must contain the credit amount and follow the prescribed manner. The linked rules govern the distribution procedure and special invoice document.
Questions to answer on the file4 questions
Other questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.
Scope,, and which wording governs the section as a whole and its footnotes
Questions to answer on the file2 questions
Frequently asked questions
What triggers the office's distributor-registration obligation?
Receipt of input-service tax invoices for or on behalf of section 25 distinct persons triggers it. The office must register under section 24(viii) and distribute credit for those invoices.
Section 20(1)
Which reverse-charge payment is included under sub-section (2)?
The stated central or integrated tax must be paid by a distinct person registered in the same State as the distributor. The services are those covered by the specified section 9 or Integrated Goods and Services Tax Act section 5 provisions.
Section 20(2)
How are central and integrated credits passed on?
Central credit is distributed as central or integrated tax, and integrated credit as integrated or central tax. A document containing the credit amount must be issued in the prescribed manner.
Section 20(3)
Amendment history
The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Change |
|---|---|
| 1 | Substituted (w.e.f. 01.04.2025) by s. 12 of The Finance (No. 8) Act, 2024.[2] |
| 2 | Inserted (w.e.f. 01.04.2025) by s. 125 of The Finance (No. 7) Act, 2025.[3] |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 24 | 20(1) requires Section 24 | 20(1) "shall be required to be registered as Input Service Distributor under clause (viii) of section 24" |
| Section 25 | 20(1) defined by Section 25 | 20(1) "for or on behalf of distinct persons referred to in section 25" |
| Section 9 | 20(1) branches on Section 9 | 20(1) "invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9" |
| Section 5 of the IGST Act, 2017 | 20(1) branches on Section 5 of the IGST Act, 2017 | 20(1) 2["or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act, 2017"] |
| Rule 39 of the CGST Rules, 2017 | 20(2) prescribed by rule 39 of the CGST Rules 2017 | 20(2) "in such manner, within such time and subject to such restrictions and conditions as may be prescribed" |
| Section 21 | Section 21 requires this provision | s.21 "distributes the credit in contravention of the provisions contained in section 20" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this section, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Circulars (4)
| Number | Date | Subject |
|---|---|---|
| Circular No. 254/11/2025-GST | 27 October 2025 | Assigning proper officer under section 74A, section 75(2) and section 122 of the Central Goods and Services Tax Act, 2017 |
| Circular No. 199/11/2023-GST | 17 July 2023 | Clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons |
| Circular No. 71/45/2018-GST | 26 October 2018 | Clarification on issues pertaining to registration as a casual taxable person & recovery of excess Input Tax Credit distributed by an Input Service distributor |
| Circular No. 31/05/2018-GST | 9 February 2018 | Proper officer under sections 73 and 74 of the Central Goods and Services Tax Act, 2017 and under the Integrated Goods and Services Tax Act, 2017. amended by a later instrument |
Notifications (4)
| Number | Date | Subject |
|---|---|---|
| Notification No. 03/2019-Central Tax (Rate) | 29 March 2019 | Seeks to amend notification No. 11/2017- Central Tax (Rate) so as to notify CGST rates of various services as recommended by Goods and Services Tax Council for real estate sector. |
| Notification No. 16/2019-Central Tax | 29 March 2019 | Seeks to make Second Amendment (2019) to CGST Rules. |
| Notification No. 02/2019-Central Tax | 29 January 2019 | Seeks to bring into force the CGST (Amendment) Act, 2018. |
| Notification No. 10/2017-Central Tax | 28 June 2017 | Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument |
Unsettled questions
The words of section 20 do not answer this question. Where one decides a matter on the file, the answer depends on the position taken on it.
- What makes a tax invoice for an input service one that an office receives "for or on behalf of" distinct persons, rather than for its own use? The sub-section turns the whole obligation on the phrase and nowhere says how the two are told apart.
See also
- Section 24 of the CGST Act, 2017: compulsory registration in certain cases
- Section 25 of the CGST Act, 2017: procedure for registration
- Section 9 of the CGST Act, 2017: levy and collection
- Section 5 of the IGST Act, 2017: levy and collection
- Rule 39 of the CGST Rules, 2017: procedure for distribution of input tax credit by Input Service Distributor
- Rule 54 of the CGST Rules, 2017: tax invoice in special cases
- Section 21 of the CGST Act, 2017: manner of recovery of credit distributed in excess
References
- Central Board of Indirect Taxes and Customs. "Section 20. Manner of distribution of credit by Input Service Distributor". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
- The Finance (No. 8) Act, 2024. Cited in CBIC footnote 1.
- The Finance (No. 7) Act, 2025. Cited in CBIC footnote 2.
External links
- CGST Act, 2017, Section 20 on the CBIC tax information portal