Branch transfer under GST

It is a common practice for businesses to transfer stock like inputs, semi finished goods, finished goods and even capital goods to their branches located at other places. Earlier these transfers were exempt under VAT. How will they be treated under GST?

Under VAT laws, branch transfers were exempt against furnishing of Form F. But all such forms have been done away with under GST.

Also, supply made without consideration in furtherance of business is considered as supply.

Thus, branch transfers will be considered as supply and will attract GST.

In GST, there is a concept of ‘distinct person’. Units of same businesses which have different registrations will be distinct persons for the purpose of this act.

For eg, a factory in Delhi sends finished goods to its retail outlet in Ghaziabad, UP.

The factory in this case is a distinct person and retail outlet is another person even if they are part of same organization.

Such transfer will be deemed supply in case of inter-state supply and consequently attract IGST.

On what value will the GST be paid ?

The basic rule in GST is to pay tax on transactional value but since this is a case of stock transfer and we cannot determine the value using TV, we will take help of determination of value rules made in this behalf.

To see, how the valuation for inter state stock transfer under GST is done please read the following article https://www.thakurani.in/shocksnmocks/Goods-Services-Tax-11-group/valuation-of-inter-state-stock-transfer-under-gst-1586/

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Branch transfer under GST

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Under VAT laws, branch transfers were exempt against furnishing of Form F. But all such forms have been done away with under GST. Also, supply made without consideration in furtherance of business is considered as supply.Thus, branch transfers will be considered as supply and will attract GST. In GST, there is a concept of ‘distinct person’. Units of same businesses which have different registrations will be distinct persons for the purpose of this act. For eg, a factory in Delhi sends finished goods to its retail outlet in Ghaziabad, UP.The factory in this case is a distinct person and retail outlet is another person even if they are part of same organization. Such transfer will be deemed supply in case of inter-state supply and consequently attract IGST. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On what value will the GST be paid ?&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The basic rule in GST is to pay tax on transactional value but since this is a case of stock transfer and we cannot determine the value using TV, we will take help of determination of value rules made in this behalf.To see, how the valuation for inter state stock transfer under GST is done please read the following article <a href="https://www.thakurani.in/shocksnmocks/Goods-Services-Tax-11-group/valuation-of-inter-state-stock-transfer-under-gst-1586/" target="_blank">https://www.thakurani.in/shocksnmocks/Goods-Services-Tax-11-group/valuation-of-inter-state-stock-transfer-under-gst-1586/</a>

Under VAT laws, branch transfers were exempt against furnishing of Form F. But all such forms have been done away with under GST. Also, supply made without consideration in furtherance of business is considered as supply.Thus, branch transfers will be considered as supply and will attract GST. In GST, there is a concept of ‘distinct person’. Units of same businesses which have different registrations will be distinct persons for the purpose of this act. For eg, a factory in Delhi sends finished goods to its retail outlet in Ghaziabad, UP.The factory in this case is a distinct person and retail outlet is another person even if they are part of same organization. Such transfer will be deemed supply in case of inter-state supply and consequently attract IGST.            On what value will the GST be paid ?                                                                                      The basic rule in GST is to pay tax on transactional value but since this is a case of stock transfer and we cannot determine the value using TV, we will take help of determination of value rules made in this behalf.To see, how the valuation for inter state stock transfer under GST is done please read the following article <a href="https://www.thakurani.in/shocksnmocks/Goods-Services-Tax-11-group/valuation-of-inter-state-stock-transfer-under-gst-1586/" target="_blank">https://www.thakurani.in/shocksnmocks/Goods-Services-Tax-11-group/valuation-of-inter-state-stock-transfer-under-gst-1586/</a>

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Branch transfer under GST