Applicability of GST in case of Transfer of Stock to another Unit

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 Whether GST applicable in case of Transfer of Stock to its another unit Located in another State?



Suppose A Ltd., Registered in Kolkata dealing in supply of electronic items, transferred some of its stock to its another unit Located in Haryana (inter state transfer). 

In this case Transfer of stock by A Ltd. are taxable under GST. The definition of supply given under section 7 of CGST Act, 2017 is an inclusive one. It does not specify that supply is to be made by one person to the another. So, self supplies are to be treated as supply in terms of section 7 of CGST Act.

Further section 25(5) provides that where a person who has obtained or is required to obtain registration in a state or a Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishment shall be treated as establishment of distinct person.

Clause (2) of Schedule I of CGST Act, 2017 inter alia provides that supply of goods between distinct person as specified in Section 25 made in the course or furtherance of business is to be treated as supply even if made without consideration. Inter-state self supplies such as stock transfers, branch transfers and consignment sales shall be taxable under IGST even though such transaction may not involve payment of consideration. Every supplier is liable to register in GST law in the state or Union territory from where he makes a taxable supply of goods or services or both in terms of section 22 of CGST Act. However, intra state self Supplies are not taxable subject to not opting for registration as business vertical. 

 


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