TaxTMI 
TaxTMI 
GST CROSS CHARGE/INPUT TRANSFER QUERY
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....ST CROSS CHARGE/INPUT TRANSFER QUERY<br> Query (Issue) Started By: - Sarath S Dated:- 15-3-2025 Last Reply Date:- 22-4-2025 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>A company engaged in IT/software export services has its Head Office (HO) in Hyderabad and a Branch Office (BO) in Bangalore. Over the years, the BO has accumulated unutilized ITC of Rs.50 lakhs (FY 2018-19 to FY 2024-25....
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....) due to a lack of taxable outward supplies. However HO is engaged in zero-rated exports and claiming ITC refunds. Considering the GST framework: * Can the BO transfer its accumulated ITC to the HO through cross charge? If so, how can it be structured legally? * Given the amendments effective from 01.04.2025 mandating ITC distribution only through the ISD mechanism, will the BO lose the accum....
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....ulated ITC post-31.03.2025? * What is the best strategy to ensure that the company does not forfeit the accumulated ITC while remaining GST-compliant? Reply By RaamSrinivasan Kalpathi: The Reply: Please value the services rendered by the branch to the HO on a monthly basis and raise a proper tax invoice on the HO and remit GST (thereby set off the ITC). The HO can avail ITC and claim ref....
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....und u/s. 54 upon export of services. In my considered view the company need not obtain ISD registration if the approach in para 1 is adopted. Query 3 - will not arise if the suggestion is adopted. Reply By Ganeshan Kalyani: The Reply: Cross charge is done to recover the internally generated service by one unit from another. So, here if BO has given any support service to HO then it can recover....
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.... its own supervision or support cost by raising a cross charge invoice. Reply By Shilpi Jain: The Reply: Structuring transactions within the provisions of the law would require to get further factual clarity. Suggested to consult a professional in this regard. Reply By KALLESHAMURTHY MURTHY: The Reply: Sir It requires more clarity. What is the nature of activity in the BO at&....
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....nbsp;Bengaluru and inward supplies effected to accumulate ITC without output generation? Reply By k.lakshmipati rao: The Reply: Dear Mr.Sarath S, I draw your attention to my views on the subject. * Can the BO transfer its accumulated ITC to the HO through cross charge? Ans. The purpose of "Cross charge" is to allocate expenses from internally generated services, exclusively meant for t....
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....he receiving Branch/H.O. 2.Given the amendments effective from 01.04.2025 mandating ITC distribution only through the ISD mechanism, will the BO lose the accumulated ITC post-31.03.2025? Ans. The purpose of " ISD " is to distribute common ITC on services procured from third party vendors relatable to Company to respective branches or Units as per the distribution method as per the provisions of ....
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....Rule-39. GST Registration is required u/s 24 of Act.<br> Discussion Forum - Knowledge Sharing ....