gst on transfer of goods

[Madhavan iyengar]

A Company in Maharashtra despatches goods to West Bengal Kolkatta for storage purpose with a agent who is registered under GST in West Bengal

Agent will store goods

A company based in Maharashtra once it receives order from Customer based in West Bengal will intimate agent to despatch goods to customer under cover of invoice of A Company and IGST will be charged

queries

a) Under What Document should A company despatch goods to agent in WestBengal

b) IS GST required to be charged when goods are despatched by A based in Maharashtra to Agent In West Bengal and Invoice is to be raised by A

C) IS A required to take registration in West Bengal

Experts Pls revert

[Rajagopalan Ranganathan]

Sir,

the replies to your queries are as under: -

Q a) Under Invoice issued under Section 31 of the CGST Act, 2017.

Q b) Yes, IGST is to be charged when goods are despatched by A based in Maharashtra to Agent In West Bengal and Invoice is to be raised by A.

Q c) Since the agent in West Bengal has registration under the GST Act, Company A need no taken registration in West Bengal. Since the agent is registered in West Bengal for the purpose of the CGST Act he will be the supplier of goods. Therefore he has to issue an invoice under Section 31 of CGST Act, 2017. He cannot supply goods under the invoice of company A.

[YAGAY and SUN]

We are in agreement with our expert on his reply to this above mentioned query.

[DR.MARIAPPAN GOVINDARAJAN]

Yes, I also endorse the views of Shri Renganathan.

[Bhavika Chothani]

Please note the reply to your queries:

a) The goods will be dispatched as a normal tax invoice.

b) IGST will be applicable on goods dispatched to West Bengal

c) Since goods are to be supplied by the agent in West Bengal who is already registered in West Bengal, Company A need not register in West Bengal.

Please note the supply by agent to Customer will be treated as intra-state supply

[NIRAJ YADAV]

Since the material is transferred for storage purpose, ownership of goods is not transferred and hence A has to take registration of GST in West Bengal and transfer goods by way of IGST Invoice in his own name to WB

Once it is sold, company A has to issue CGST/SGST Invoice from WB to the local customer in WB. Company A can take input Tax credit of IGST at the time of sale.

AI Summary

IGST applicability on goods sent to a registered agent: invoice treatment and potential registration obligation depending on transfer of ownership.
The dispatch to a West Bengal agent should be accompanied by a tax invoice and interstate movement attracts IGST when invoiced by the supplier; several experts treat the West Bengal agent as the local supplier who need not oblige the principal to register in West Bengal and who must issue the invoice. An alternative view states that if ownership is not transferred and goods are sent merely for storage, the principal remains supplier, must register in West Bengal, issue an IGST invoice for the interstate transfer, and later issue CGST/SGST invoices on sale while claiming IGST credit.