In terms of Section 20(2) of CGST Act, an Input Service Distributor can distribute the credit subject to the following conditions:
The credit should be distributed to recipient against a document containing such details as given in Rule 54(1) of the CGST Rules, 2017;
The amount of credit distributed shall not exceed the amount of credit available for distribution;
The credit of tax paid on input service attributable to a recipient of credit shall be distributed only to that recipient;
If credit is attributable to more than one recipient, then it shall be distributed
among such recipient(s) to whom the input service is attributable on pro rata
basis of the turnover in a State of such recipient during the relevant period, to the aggregate of the turnover of all such recipients to whom such input service Is attributable.
If credit is attributable to all recipients, the above method of allocation on pro rata may be applied with reference to all recipients.
(ICAI FAQ PUBLICATION 06-09-2017 -: Distribution of credit by the Input service distributor : FAQ NO. 39)