Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Stock transfer

Core Advice (19 Points)

24 May 2017

Dear Team,

what will be treatment of stock transfer within state? From one depot to another .

Reply
Follow
Share

3 Replies

chamarthi venkatesh (Student CA Articleship) (848 Points)
Replied 24 May 2017

Not comes into the purview of 'Supply' definition. So, not taxable.

Inter state ( between the states ) stock transfers are covered under ' Section 7 : Scope of supply 'of GST act.
So, taxable.

Upgrade to CAclubindia Pro. Subscribe Now!

rohit (none) (186 Points)
Replied 24 May 2017

If you have taken more than one registration (within state or otherwise) you will be required to pay GST.

Note: Transfer between two registered units.

1 Like

Core Advice (19 Points)
Replied 24 May 2017

Every registered person who causes "movement of goods" of consignment value exceeding fifty thousand rupees -

(i) in relation to a supply; or

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person, shall, before commencement of movement, furnish information relating to the said goods in Part A of FORM GST INS-01, electronically, on the common portal.

Any transporter transferring goods from one conveyance to another in the course of transit shall, before such transfer and further movement of goods, generate a new e-way bill. Thus every movement may it be from factory place to the place of transporter, or sending goods to job worker or a movement from manufacturers one location to another shall require an e-way bill. This would be burdensome for the supplier because he will have to keep gauge of every movement of goods.

Also, there are rigid timelines regarding e-way bills. If the goods do not reach the destination in time mentioned in the E way bill then the earlier E way bill will expire and a new E way bill will have to be generated. In case of unforeseen circumstances leading to transfer of goods from one vehicle to another will nullify the earlier e-way bill and transporters would have to create a new e-way bill on the GSTN portal before moving ahead.

The entire multi-layered process will require participation by the supplier, the transporter and even the recipient, who have to communicate its acceptance or rejection of the consignment covered by the e-way bill within a very short period. This will cause myriad of inconveniences and cumbersome digital work for small time businessmen.

Further transporters generally belong to a class that is unorganized and is not well versed with digital equipments, thus it will be a challenge to implement this system smoothly.

Also the assessee will be left burdened with generating the E Bills for every single movement of goods. The proposed E-way bills, which will be required for movement of goods will make transport of goods a cumbersome, delayed and pricey affair under the GST regime.