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Query Franchisee GST

09 April 2025

Hi ,

As franchisor, can we raise of bill of supply to franchisee for unfinished goods sent to franchisee or for any staff who was sent to franchisee location on site visit or deputation for 1 month .
This is because we don't want to raise tax invoice as it is leading to double GST

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2 Replies

Money Money (433 Points)
Replied 10 April 2025

Raising a **bill of supply** instead of a tax invoice is generally permissible only for **exempt supplies** or supplies under the **composition scheme**, as per GST regulations. Here's how this applies to your situation:

1. **Unfinished Goods**: If the unfinished goods sent to the franchisee are taxable, a tax invoice is required. However, if these goods are exempt from GST, you can issue a bill of supply instead. If the goods are sent for job work or processing, you may consider issuing a delivery challan instead of a tax invoice, provided the conditions under GST rules for job work are met.

2. **Staff Deputation**: For staff deputation or services provided to the franchisee, if these are taxable services, a tax invoice must be issued. If the services are exempt, a bill of supply can be issued. Alternatively, if the staff deputation is treated as a reimbursement of expenses, ensure proper documentation to avoid GST implications.

To avoid double GST, you may want to review the nature of the transaction and ensure proper classification. For instance:
- If the goods or services are being transferred without consideration, it may not qualify as a "supply" under GST, and no tax invoice may be required.
- If the franchisee is registered under GST, they can claim input tax credit (ITC) on the tax invoice, mitigating the double GST issue.

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Sunil Upadhyay (3 Points)
Replied 14 April 2025

Thanks for elaborate reply . However in case of restaurant both franchisee and franchosor are in composite scheme of 5% . Thus how can we avoid double GST on things supplied from franchisor to franchisee for consideration