M/s AZ Ltd. having head office at Place1 has transferred some goods & rendered some service to Branch office at Place2.. Goods of value of Rs.1,00,000/-(Say,GST rate of 12%) and Marketing service on behalf of Branch of Rs.65,000/-. My queries are:
1.Whether the above transactions of Goods & Services are Taxable by Head office w.r.t Branch in both cases of Intra state & Inter State locations?
2.If Taxable, What is the nature & procedure of Invoicing to be followed?
3.What is the Valuation of Supply procedure to be followed?
4.Are there any Input Tax Credit options available under Inter Branch transaction of Goods & Services?
5.How the Branch transactions are different on compare to other third party transactions?
1. Inter branch or HO to branch stock transfers , where such branches or HO and Branch office are located and registered in different States are treated as supply, even if it is without consideration as per para 2 of Schedule I of the CGST Act, 2017 as they are deemed distinct persons. However transfers within branches in same State covered under same registration not taxable.
2. Normal tax invoice as per Sec 31 to be raised.
3. Valuation to be made as per Rule 28 / 30 /31 of the CGST Rules, 2017.
4. Yes, ITC can be availed by the recipient branch of taxes paid, if ITC is admissable as per Section 16/17 of the CGST Act,2017.
5. Different on two counts, first one being they are taxable even if they are without consideration and secondly even if they are for consideration the transaction value will be disregarded and valuation is to be made as CGST Rules, 2017.
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