Transfer of Fixed Asset Across States for Exempt Clinical Use – GST & Compliance Query

[Pankaj Singh]

Hi,

Please help with the query below:

We have a machine (fixed asset) purchased at HO in Haryana, which needs to be used in Delhi / UP. It will be internally transferred (not sold), and may move multiple times across states. Since the usage is for clinical services (exempt under GST), treating ITC as cost, hence not feasible to invoice every time the machine moves.

So, I’m considering this approach:

1. Enter into a service / usage agreement from Haryana to the other unit(s), with monthly invoicing based on actual usage in that state.
2. For each physical interstate movement, carry a delivery challan / goods movement document (machine details, origin, destination, vehicle, etc.), along with an e-way bill (if required), referencing the contract / invoice.

Please confirm whether this approach is valid? I am particularly concerned about the risk of interception during transport- what documents must be carried to avoid issues in transit?

Thanks,

AI Summary

Structure interstate movement of fixed asset for exempt clinical use via usage agreement, delivery challan, e-way bill and records Interstate movement of a fixed asset retained as a non-sale for exempt clinical use can be structured by a usage/service agreement with periodic invoicing, but authorities may scrutinize whether movements constitute a supply. For transit, carry a delivery challan describing the asset, address of origin and destination, vehicle and transport details, and reference to the usage agreement and monthly invoice; generate an e-way bill when statutory thresholds require one. Maintain documentary proof of exempt clinical use (contract, asset register, time/location logs), GST registrations of both units, transport papers, insurance and authorized signatory/POA to reduce interception risk and disputes. Consider confirming treatment with a GST specialist.