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GST related query

Ajnas (Student) (844 Points)

17 January 2021

In case of interstate transfer of goods, Branch B transfer the goods from Karnataka to head office A in mumbai Rs. 100000+18% , then while consolidating the head office and branch, inter branch stock transfer Rs.100000 is in both accounts is eleminated, my query is about Rs. 18000 GST ouput and input in both accounts(ie,head office, branch) is required to eliminate?

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 17 January 2021

If value of the supply cannot be determined in terms of open market value, then there are two proviso provided under Rule 28. The first proviso provides that an option to the supplier either valuing the supply at open market value or ninety percent of the price charged for goods or services of like kind and quality. However, this option is available only in case of stock transfer of those goods which the recipient is intended for further supply to an unrelated person.
And second proviso provides that in cases where recipient of goods is eligible to take full input credit of those goods that are stock transferred, then whatever the value adopted by the supplier shall be deemed to be the open market value.

Therefore, stock transfers for further supply can be valued on the basis of open market value which could be any value as declared by supplier in the invoice if recipient of goods eligible to take full Input tax credit (second proviso) or on the basis of 90% of the price charged for goods of like kind and quality (first proviso).

For example, AFA Ltd. has head office in Rajasthan and also has warehouses in Uttrakhand, Maharashtra. Here HO has transferred the goods costing of Rs. 1,50,000 (FMV Rs 3,10,000) to its branch located in Maharashtra for further supply to a unrelated customer of Rs 300,000.

in this case, AFA Ltd. where the goods are transferred for the further supply then HO has an option of valuing the goods at FMV Rs. 3,10,000 or 2,70,000 (90% of price charged from unrelated customer). Since, the receiving branch is entitled to full ITC, HO can even transfer the goods at cost of Rs.1,50,000/- to their liking by mentioning the same in the invoice issued for this purpose.

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Ajnas (Student) (844 Points)
Replied 17 January 2021

Sourav what is the answer of my question

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 January 2021

Is separate GSTIN maintained for both the branches.

Ajnas (Student) (844 Points)
Replied 17 January 2021

Sir for income tax filing while consolidatating the both books GST ouput and input in both accounts(ie,head office, branch) is required to eliminate?,

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 January 2021

Mention it separate if both the branches have separate GSTIN otherwise consolidate it

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Ajnas (Student) (844 Points)
Replied 18 January 2021

That means stock i and stock is required to shown under sales and parchse seperately p&,
ouput and input required to seperately, consolidation no effect on ouput and only on stock in stock out balance?