What is a taxpayer stores good other than registered place of business

[Rajesh Kumar]

Sir/ Madam,

If a registered person store his taxable goods other than his registered place of business then what coercive action department can take ?

What if taxpayer shows invoices of that goods wherein his GSTN is mentioned but place of supply is different?

Can department deny ITC availed on that invoices partains to that goods ?
Can department declare that goods as clandestine removal of goods ?

[Rajagopalan Ranganathan]

Sir,

Declare the new premises as an additional place of business in your registration certificate. From the date of such addition, you are eligible to avail ITC in the goods though received prior to its addition. Since you are in possession of tax invoices the Department cannot allege clandestine removal subject to the condition that the supplier is non-existing and the invoice is fake.

[Shilpi Jain]

If a registered person store his taxable goods other than his registered place of business then what coercive action department can take ? - The place where you store your goods would be a place of business. In section 22 it states only that registration in the State is required. There is no stipulation in the law to register the additional place of business except that the Form REG-01 (which is part of law) requires declaration of additional place of business. Also, sec 16 requires a registered person to avail credit, it does not mention that the goods or services should be received at registered place of business.

Ensure that the invoice of these goods have your GSTIN. Though, dispute free would be to add it as additional place of business.

So not adding as place of business in registration and storing goods there could be a procedural lapse at the most

What if taxpayer shows invoices of that goods wherein his GSTN is mentioned but place of supply is different? - What is the place of supply? you mean the address of receipt of goods in the invoice? If that is the case, the department may not know at the later point of time this happened. However, suggestion as above to add in registration.

Can department deny ITC availed on that invoices partains to that goods ? - replied above
Can department declare that goods as clandestine removal of goods ? - the best thing they can do is this to get more revenue, but this may not hold good once you have issued invoice to customer in respect of these goods and paid tax. The regsitered and unregistered place of business may not be regarded as distinct persons in terms of section 25.

Howere, best would be to add as APB

[KASTURI SETHI]

Sh.Rajesh Kumar Ji,

As per Section 155 of CGST Act, the burden of proof is cast upon the assessee/registered person (tax payer) to prove that transaction is genuine. So as per Section 16 (2)(b) of CGST Act, the person who avails ITC is to prove that inputs (goods) were received physically. Goods must be received in registered premises (may be additional place of business). If that person fails to prove, ITC can be denied. Penalty can be imposed (Section 122 is vast) and interest can be recovered.

Regarding clandestine removal of goods, it depends upon the result of investigation by the department.

[CA Hemanth Kumar]

Dear Sir,

If a registered person store his taxable goods other than his registered place of business that premises will be considered as a place of business as per section 2(85)

(85) “place of business” includes––

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or

(c) a place where a taxable person is engaged in business through an agent, by whatever name called;

Once we consider storage location as a place of business, it can be deemed that the goods has been received by us to comply the consition of receipt of goods as per section 16(2)(c). Further explanation to section 16(2)(b) also supports the same.

1[Explanation.-For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services––

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise

This explanation cover transactions other than bill to ship to also.

At max dept can levy general penalty (Max ₹ 25000) not adding the additional place of business in the registration considering it as a procedural laps.

The question of clandestine removal of goods will come only in case if stored goods have not suffered or paid tax on it.

based on the experience of e-way bill errors and the actions taken, department may seize the goods and ask us to prove the tax payments made, ownership etc

[Shilpi Jain]

Also highlighting another point is that the law does not stipulate that the goods should be received at the registered premises, unlike under the earlier IDT laws.

However, all these points would help in litigation. If possible add it as APB.

AI Summary

Place of business: declare additional storage locations to secure input tax credit and reduce risk of denial or penalties. Storing taxable goods at a premises other than the registered address renders that location a place of business and should be declared as an additional place of business; declaring it supports entitlement to input tax credit for goods received there. The registered person bears the burden of proving genuineness and physical receipt; absence of proof can lead to denial of ITC, recovery of interest, and penalties. Whether goods are treated as clandestine removals depends on investigation and proof of tax payment and invoice authenticity.