Inductive filter vs capacitive filter: Which is better and gives less THD on the input side

Your output filter response should basically be the 20 dB/decade response of the capacitor.

The ESR zero will depend on the number and type of capacitors you're using. It's the natural corner frequency formed by the effective ESR and total capacitance:

\$ F_z = \dfrac{1}{2 \pi \times R_{esr} \times C_{out}} \$

The gain slope will swing more positive at the zero, and you'll see the phase changing as well. You can easily use a free SPICE simulator like LTSpice IV to model the output precisely (with ESRs, ESLs, etc.) and generate a Bode plot.

Robert, Nonlinear loads would introduce odd harmonics in current (mainly 3rd, and next 5th). The Voltage supply THD would be effected by harmonic current due to input impedance drop. My first reaction is to measure the harmonics in current drawn by VSD by a PQ meter; it is likely to be rich in 150Hz and 250Hz. Simulate the power supply and VSD load and fine tune the filter required. By rule of thumb, connect a 30% kVA rating LC shunt filter tuned for 150Hz, on load bus. Pure inductance in series or Capacitor in shunt are not an elegant solution. I have faced this problem on 25kV 50Hz single phase ac electric traction supply and shunt tuned LC filter solution has worked for 10 years, after burning quite a few MVAR pure shunt PFC. I can simulate the system for you for free (no charge) if the source impedance, supply cable and load parameters details are known.You can try MATLAB or PSPICE yourself too. Ofcourse there is an expensive solution of DPFC too. Best of luck.