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CA Intermediate · Taxation · Supply under GST

Mehta Textiles Pvt. Ltd., Surat, sends a consignment of fabric to its own depot in Jaipur (Rajasthan) for later sale. Both the Surat office and the Jaipur depot are registered under the same PAN, each with its own GSTIN, and no consideration is charged. How does GST treat the movement of goods?

The movement is treated as a supply. Branches or depots of the same entity registered in different States are distinct persons, and Schedule I deems supplies between distinct persons in the course of business to be supply even without consideration, so GST applies.

  1. AIt is a supply because the two registrations are distinct persons in different StatesCorrect
  2. BIt is not a supply because no consideration is received
  3. CIt is a supply only if the goods are sold within six months
  4. DIt is a supply only if the value exceeds Rs 50,000

Explanation

Under Schedule I, activities between related or distinct persons in the course or furtherance of business are treated as supply even without consideration. Establishments of the same entity in different States are distinct persons. Hence the stock transfer is a taxable (inter-State) supply. The option citing absence of consideration ignores Schedule I.

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