23 May 2023
Dear Experts, We are transferring a laptop having zero book value to an associate company for a consideration of 5,000. As per Sec 18(6) & Rule 44(6), GST payable is 1,503 as follows by higher of GST on sale (900) or ITC pertaining to remaining life (1503). Hence we need to pay 1503 on this sale. However, I have below doubts.
1. Will it require E-invoice for this sale, We are already issuing E-invoices for other transactions. 2. While raising an invoice for this sale, Which amount of GST has to report in Invoice 900 (18% on 5,000) or 1503? 3. Whether the recipient is eligible for claim ITC? I think yes but which amount 900 or 1503?
06 July 2024
Let's address each of your doubts regarding the sale of the laptop to an associate company under GST regulations:
### 1. E-invoice Requirement:
**E-invoice Requirement:** - According to GST rules, e-invoicing is mandatory for businesses with an aggregate turnover exceeding a specified limit. If your business falls under this category and you are issuing e-invoices for other transactions, this sale of the laptop would also require an e-invoice.
### 2. GST Amount on Invoice:
**GST Amount on Invoice:** - The GST amount to be reported on the invoice should be based on the higher of the following two amounts: - **GST on Sale Price (900):** This is 18% of the consideration amount (5,000), which equals 900. - **ITC Pertaining to Remaining Life (1503):** This is the amount calculated under Sec 18(6) & Rule 44(6), which in your case is 1,503.
- Therefore, you should report **1,503** as the GST amount on the invoice.
### 3. Input Tax Credit (ITC) Eligibility:
**ITC Eligibility for Recipient:** - The recipient company is eligible to claim Input Tax Credit (ITC) on the GST amount paid by you (the seller). Since you are invoicing 1,503 as the GST amount, this is the amount of ITC the recipient can claim.
### Summary:
- **E-invoice Requirement:** Yes, e-invoice is required for this sale. - **GST Amount on Invoice:** Report 1,503 as the GST amount on the invoice. - **ITC Eligibility:** The recipient company can claim ITC on the GST amount of 1,503.
By following these guidelines, you ensure compliance with GST regulations while accurately reflecting the transaction on your invoice and allowing the recipient to claim the eligible Input Tax Credit. If you have specific details related to invoicing procedures or other tax implications, consulting with a GST expert or tax advisor would provide tailored guidance for your situation.
CAclubindia
