GST on Inter Branch Transaction

[Sanjeev Sharma]

A Delhi based Company is having a sales and marketing office in Mumbai. All goods ( which are exempted from GST) are sold to the customers directly from Delhi.

Mumbai office does not make any taxable supply and therefore not registered under GST.

Does Mumbai office is required to raise bill on Delhi Office for sales and marketing services provided and to charge GST.

[YAGAY andSUN]

You may issue Bill of Supply in such transactions along with e-way bill.

[Himansu Sekhar]

Mimbai office should take regn and receive the goods through bills.

[CASusheel Gupta]

Mumbai office is a distinct person under section 25

In r/o services being provided to Delhi office by Mumbai office it needs to take registration and raise bill on Delhi office for the expenses reimbursement by Delhi.

Separate books of accounts also needs to be maintained.

Thanks and Regards

CA Susheel Kumar Gupta

8510081001, 9811004443

[KASTURI SETHI]

The activity of Mumbai office is taxable under GST Acts.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of experts

[PAWAN KUMAR]

As per my view, mumbai office is providing services of sales and marketing. PAN is same as in Delhi and Mumbai. As per GST provisions, an supplier is required to be registered in a state where he makes taxable supply of goods or services. Delhi office goods is exempt, but mumbai office service is taxable and thus aggregate turnover for taking registration shall also include value of exempt goods sold by Delhi office. Therefore mumbai office need to take registration as distinct person and charge igst to Delhi office. It will cover under s.no.2 of schedule II CGST Act, 2017.

[KASTURI SETHI]

Well explained by Sh.Pawan Kumar, an expert.

[Ganeshan Kalyani]

Mumbai office has to take registration. If it does not avail services that are covered under reverse charge notification then it can take ISD registration. By taking this registration mumbai office can set off the credit on services availed against the tax payable on the business support service invoice that it has to raise on the Delhi office.

AI Summary

Taxable marketing services: branch must register in state of supply and invoice head office, charging applicable IGST. Mumbai branch is a distinct person when providing taxable sales and marketing services to the Delhi head office and must register in the State of supply, raise an invoice charging applicable IGST to the head office, and maintain separate books; aggregate turnover for registration includes exempt goods sold by the head office. Alternatives include issuing a bill of supply for exempt movements with an e-way bill or obtaining ISD registration to distribute or set off input tax credits.