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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 .

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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.

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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.

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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.