# Set Up GST Input Service Distributor (ISD)
**YouTube:** [How to Set Up GST Input Service Distributor ( ISD ) in Logic ERP?](https://www.youtube.com/watch?v=N24FaxE6BLk)
## 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**
* Create a separate tax type for **IGST ISD**
* Save the configuration.
***
### Setup Item Group & Group Wise Taxes
#### Item Group Setup
* Open **Setup Item Group**
* Refresh **GST Taxes Group**
* Create a new group (e.g., **Audit Expense 18%**)
* Allocate the service item to this group
#### Group Wise Taxes
* Open **Set Group Wise Taxes**
* Select **Audit Expense 18%**
* Choose applicable tax region (CGST / SGST / IGST)
* Refresh and assign the ISD tax types
* Save the setup
***
### Post Purchase Voucher
* Open **Purchase Voucher**
* Transact the service item
* Press **F2 (View Totals)** to verify tax calculation
* Save the voucher
***
### Configure Journal Voucher for ISD
Two separate configurations are mandatory:
#### ISD Invoice Configuration
* Open **Journal Voucher Configuration**
* Create configuration: **JV ISD Invoice**
* Set **GST ISD Doc Type = ISD Invoice**
#### ISD Distribution Configuration
* Create another configuration: **JV ISD Distribution**
* Set **GST ISD Doc Type = ISD Distribution**
***
### Forward Input Tax to Control Account
* Pass journal entry using **JV ISD Invoice**
* Save the voucher
* Open **Ledger Report** to verify:
* Input tax credit is debited to the **ISD Control Account**
***
### Pass ISD Distribution Entry
* Use **JV ISD Distribution**
* If an error appears stating:
> “Only CGST and SGST distribution allowed for this branch”
#### Resolution:
**Step 1**
* Select the **correct receiving branch for IGST**
**Step 2**
* Open **Setup Branches**
* Verify **GST State Name**
* Verify **GST Number**
* Save the voucher again.
The entry will now be saved successfully.
***
### Final Verification
* Open **Ledger Report** and refresh.
* Observe:
* **ISD Control Account balance = Nil**
* GST credit distributed correctly to branches
***
### Conclusion
This complete ISD workflow ensures:
* Proper **GST compliance**
* Accurate **Input Tax Credit distribution**
* Clean and auditable accounting records
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