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CA Intermediate · Taxation · Supply under GST

Kapoor Traders, a registered dealer in Jaipur, transfers goods worth Rs 5,00,000 (its normal selling price) from its Jaipur head office to its own branch in Jaipur, which is a separate registration in the same State, without any consideration. Both are registered under the same PAN. Which statement is correct under CGST Act, 2017?

It is a supply. Registered establishments of the same person with separate registrations are distinct persons, and Schedule I treats supplies between distinct persons in the course of business as taxable even without consideration. The location within the same State does not change this.

  1. AIt is a supply, because distinct persons under the same PAN making supply to each other in the course of business are treated as distinct persons even within the same StateCorrect
  2. BIt is not a supply, because the transfer is within the same State
  3. CIt is not a supply, because no consideration is received
  4. DIt is a supply only if the branch is outside Jaipur

Explanation

Establishments of the same person in different registrations (same State or not) are treated as distinct persons. Schedule I treats supply of goods or services between distinct persons in the course or furtherance of business as supply even without consideration. So it is taxable; the same-State and no-consideration arguments are wrong.

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