This paper establishes inductor coupled T-type voltage source inverter (ICT-VSI) supported distribution static compensator (DSTATCOM) for enhancement of power quality (PQ). The ICT-VSI utilized a inductor network in between the two section of T-type voltage source inverter (T-VSI); for three-phase three-wire (3-P 3-W) electrical utility system, it is established as a power conditioner. The new topology produces a balanced voltage at point of common coupling (PCC) with good quality and low total harmonic distortion (THD) source currents, which improves the power quality (PQ) in 3-P 3-W traditional electrical utility system. The comparative evaluations of T-VSI with ICT-VSI are presented in the literature and the strength and effectiveness of the ICT-VSI is verified by simulations using MATLAB/Simulink environment. Finally, justified the advantages of the ICT-VSI on the base of PQ issues considering the standard value of IEEE-2030-7-2017 & IEC-61000-1 grid code.