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CMA Final · Indirect Tax Laws and Practice · Accounts and Records

Sharma Cold Storage Pvt Ltd operates a godown in Nagpur and stores goods of several traders. Under Rule 58(5) of the CGST Rules, 2017, how must it store the goods?

The operator must store goods so they can be identified both item-wise and owner-wise, and must facilitate any physical verification or inspection by the proper officer on demand. Identifying only the owner, or storing goods mixed in bulk, would not meet the requirement.

  1. AIn such manner that goods can be identified item-wise and owner-wise, facilitating physical verification by the proper officer on demandCorrect
  2. BOnly after obtaining a separate registration in each owner's State
  3. CIn bulk without segregation, provided stock records are maintained monthly
  4. DIn a manner that allows identification of the owner only, with item-wise detail kept optional

Explanation

Rule 58(5) says the godown owner or operator shall store goods so that they can be identified item-wise and owner-wise and shall facilitate physical verification or inspection by the proper officer on demand. Identification of owner alone is insufficient, and bulk storage without segregation does not satisfy the rule.

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