Set Up GST Input Service Distributor (ISD)

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How to Set Up GST Input Service Distributor (ISD) in Logic ERP?

In this tutorial, we will explain how to configure an ISD (Input Service Distributor) branch and manage ISD-related accounting entries in Logic ERP. Let’s begin with the complete setup and posting process.

Create ISD Input GST Accounts

Open Setup New Account.
Create the following Input GST ISD accounts:
- CGST Input ISD
- SGST Input ISD
- IGST Input ISD

While creating these accounts:

For CGST Input ISD, select ISD CGST from the GST Type dropdown.
For SGST Input ISD, select ISD SGST.
For IGST Input ISD, select ISD IGST.

Create ISD Control & Expense Accounts

Create an ISD Credit Distribution Control Account
- Account Type: Current Assets

Create a Service Expense Account (e.g., Audit Fees Expense)

Configure ISD Branch

Open Setup Branches.
Create a new branch.
Set GST ISD Branch = True.

Enter all required GST and branch details correctly.
Save the branch.
Log in to the newly created ISD branch to continue.

Post Service Purchase Entry in ISD Branch

Go to Accounts → Journal Purchase Entry.
Ensure the ISD branch is selected.
Credit the party ledger from whom the service is purchased.
Enter:
- Service amount
- CGST / SGST / IGST exactly as per the invoice

Save the voucher.

The GST input credit is now posted to the ISD Input GST ledgers.

Pass ISD Distribution Voucher (Journal Normal)

The ISD branch cannot use GST credit directly. It must be transferred to other branches.

Open Journal Voucher – Normal.
Pass the ISD Distribution Entry to forward the GST input credit to the ISD Control Account.

Save the voucher.

Transfer Credit to Receiving Branches

Open Journal Voucher – Normal again.
Select the Receiving Branch.

Post the ISD distribution entry.

Save the voucher.

The GST credit is now transferred from the ISD branch to the respective branches.

Note: In this entry, the balance of your Control Account will be transferred to the Normal GST Input account of the second branch.

Verify Ledger Posting

Open Ledger Report.
Observe:
- ISD Credit Distribution Control Account shows Nil balance.
- Receiving branches show GST credit under their Input Tax Credit ledgers.

Configure Purchase Tax Types for ISD

Open Setup Purchase Tax Types.
Refresh any existing tax type for reference.
Create tax types for service expenses:
- Define CGST Input ISD and SGST Input ISD
- Set tax rate as 9% in Tax 1 and Tax 3
- Set Use for GST = GST
- Select GST Type as CGST / SGST