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CA Intermediate · Taxation · Supply under GST

Kavya Textiles, Surat, sends fabric worth Rs 8,00,000 to its own registered branch in Chennai (a different State, with a separate GST registration) as stock transfer, without any payment. Another unit in the same State and same GSTIN also receives goods worth Rs 2,00,000. Which is correct?

Only the transfer to the Chennai branch is a supply. Establishments of a person registered in different States are distinct persons, and Schedule I makes supplies between distinct persons in the course of business a supply even without consideration. Movement between units under the same GSTIN is not a supply.

  1. ABoth movements are supplies
  2. BNeither movement is a supply
  3. COnly the Chennai transfer is a supply, as the branches are distinct personsCorrect
  4. DOnly the same-GSTIN movement is a supply

Explanation

Establishments in different States with separate registrations are distinct persons, so Schedule I treats supply without consideration between them as a supply. Units under the same GSTIN are the same person, so internal movement is not a supply. Hence only the Chennai transfer is taxable.

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