Movement Between same GST Units

[JOHN SHANNEL]

Hello friends,

Our organization has 2 units which is 500 meters apart and has same GST number. While transferring inventory between the units, do i need to raise delivery challan as per rule 55 and show taxable value, tax rate and tax amount. Please clarify.

 

[Ganeshan Kalyani]

Yes, Sir, you will have to raise delivery challan. As regard tax rate and amount, it is shown on DC as a general practice, otherwise law requires to mention tax only when there is a supply.

[KASTURI SETHI]

Here is legal backing in support of the reply of Sh.Ganeshan Kalyani Ji.

FAQ dated 31.7.2017 issued by Board.

Question 15 : Which is the document required to be issued by the Registered Person for supply of goods from one premises to another premises under the same registration number?

Answer : In terms of Rule 55(1)(c) of the CGST Rules, 2017 such movements have to be effected under the cover of a delivery challan along with any other document that may be prescribed in lieu of the e-way bill.

[JOHN SHANNEL]

Thanks for the clarification, I am confused with the below clause, where it says tax rate and tax amount is required to be mentioned only in case of supply to consignee. In my case since sender and receiver are same GST consignor and consignee are same ( my interpretation). Please clarify.

(vii) tax rate and tax amount – central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee;

[KASTURI SETHI]

 There is nothing to  worry about. The reply of Sh.Ganeshan Kalyani Ji is very much clear. When no supply is involved, why to worry about rate of tax and amount of tax. You want to store the goods and not to sell/supply the goods.  For your satisfaction, you can mention the rate of tax (purchase) and amount (purchase). 

[Shilpi Jain]

Delivery challan is also a document to update your inventory position at each location. So any movement should be backed up by a document which is DC is the present case

[Padmanathan KV]

agree with views of experts. DC need not mention tax.

AI Summary

Delivery Challan Required for Inventory Transfer Between Units Under Same GST Number, Rule 55 CGST Rules 2017 An organization inquired about the necessity of issuing a delivery challan when transferring inventory between two units with the same GST number, located 500 meters apart. Experts in the forum confirmed that a delivery challan is required as per Rule 55 of the CGST Rules, 2017, but clarified that tax rates and amounts need only be shown if the movement constitutes a supply. Since the transfer is not a supply, specifying tax details is unnecessary. The delivery challan serves to update inventory records, and mentioning purchase tax rates and amounts is optional for internal clarity.