Gst applicability on branch transfer

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Jagadish (Querist)
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17 September 2018 Greetings for the Day..

Can I please be enlightened about the implications under GST as well as the procedures to be followed for sending an item of machinery form a job worker in Telangana to the Plant located in Odisha. The materials for the erection of the said machinery have been purchased form local markets in hyderabad

In other words, whether GST is payable on such transfer and what are the documents on the basis of which the said item can be sent by road

Thanks in Advance.

Rajesh Kumar

Rajesh Kumar (Expert)
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17 September 2018 From the job worker, the goods shall be transferred on delivery challan, along with Invoice of job charges on which GST is paid, if applicable. E way bill shall be prepared by job worker if he is registered; otherwise E-way bill shall be prepared by the principal supplier.

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Jagadish

Jagadish (Querist)
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18 September 2018 Thank you sir. Much obliged to receive your valuable reply

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Jagadish

Jagadish (Querist)
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21 November 2018 Sir, by the way what should be the HSN Code for raising the waybill

Thanks in advnace

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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26 July 2024 Sure, I can help with that! The Goods and Services Tax (GST) implications for branch transfers, especially involving job workers and inter-state movements, can be a bit complex. Here's a breakdown of what you need to know:

### GST Implications on Branch Transfer:

1. **Nature of Transfer**:
- **Job Worker Scenario**: When transferring machinery from a job worker in Telangana to a plant in Odisha, it's crucial to establish whether this is a mere transfer between branches of the same company or whether it's a movement from a job worker to a plant.
- **Inter-State Movement**: This is an inter-state movement of goods, which usually involves GST implications.

2. **Applicable GST**:
- **Inter-State Supply**: Since the transfer is between states (Telangana to Odisha), it constitutes an inter-state supply under GST, which is subject to Integrated GST (IGST).
- **Job Work**: If the machinery is being moved back to the plant after being worked on by a job worker, this might not be considered a supply but rather a job work movement. In such a case, the principal manufacturer is not required to pay GST on this transfer if the job worker is only performing work on the goods and not engaging in a sale.

3. **Documents Required**:
- **Waybill or E-way Bill**: For transporting goods from Telangana to Odisha, an e-way bill is required under GST rules. This is essential for tracking the movement of goods and ensuring compliance.
- **Invoice**: Although this may not be a sale, an invoice or a delivery challan should be raised for the transfer. This should contain details of the machinery, value, and GST details. The delivery challan or invoice should clearly mention that it is a transfer of goods for job work or internal purposes.

4. **Documents to be Raised**:
- **Delivery Challan**: If no sale is involved, a delivery challan can be issued. The challan should include the following:
- Details of the sender and receiver
- Description of the machinery
- Quantity and value of the machinery
- The purpose of movement (e.g., "Job Work" or "Branch Transfer")
- GSTIN of both sender and receiver

5. **HSN Code**:
- **HSN Code**: The Harmonized System of Nomenclature (HSN) code is used to classify goods. For machinery, you will need to use the specific HSN code relevant to the type of machinery you are transporting. Machinery typically falls under Chapter 84 or 85 of the HSN code list. For the exact HSN code, refer to the detailed description of the machinery, which you can match with the appropriate HSN code from the GST HSN code list.

### Summary of Steps:
1. **Generate E-way Bill**: Ensure you have an e-way bill for the transportation of goods.
2. **Prepare Delivery Challan/Invoice**: Create a delivery challan or invoice for the transfer. Include all necessary details and state that it is for job work or internal purposes.
3. **Select HSN Code**: Use the relevant HSN code for the machinery being transported.

Make sure to consult with a GST consultant or tax advisor to ensure compliance with the specific provisions applicable to your situation and to get guidance on the correct HSN code.