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

Interstate movement of fixed asset: require delivery challan and e-way bill while usage invoicing allows ITC set off.
Interstate movement of a fixed asset for exempt clinical services should be managed via a usage agreement with periodic state-wise invoicing; each physical transfer must be accompanied by a delivery challan and an e-way bill where applicable, with records and the usage contract available for inspection, and ITC on the asset purchase availed initially and set off against GST on usage charges.