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Interstate branch transfer valuation, Goods and Services Tax - GST

Issue Id: - 117690
Dated: 10-12-2021
By:- ravi kiran
Interstate branch transfer valuation

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Dear Sir

Head office in Mumbai Pan No is same for HO & Branches with different GST Nos.

Branches in 5 states. Trading company importing inks from Europe in Mumbai and stock transfer to branches.Customs duty is paid, fright charges paid, insurance paid, landed cost is arrived at say ₹ 100. it is final product that us imported. No further processing is involved either Ho or at branches.

The selling price in Ho to its customers and in Branches to customers vary. Say ₹ 200 or 250 or 300.

At what price, stock transfers should be done. Is it ₹ 100 or with 10% addition ₹ 110. Or 90% of the sake price say ₹ 180

Which rule is applicable for our organisation rule 28 or 30?

Thanks & Regards

ravi kiran


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Posts / Replies

Showing Replies 1 to 5 of 5 Records

1 Dated: 11-12-2021

Rule 28 (1)(a) of CGST Rules safe. You will resort to Rule 30 only if value cannot be determined under Rule 28. Keeping in view of both provisos of Rule 28, value to be charged should not be less than similar goods. In other words, open market value should be preferred. No question of 110% under Rule 30 when similar goods (kind and quality) are available in the market.

Focus on following the valuation not less than market price.

2 Dated: 12-12-2021
By:- Ganeshan Kalyani

Also see the rule which provides that if the recipient is able to take Input Tax Credit then any value is considered as correct.

3 Dated: 12-12-2021
By:- Shilpi Jain

2nd proviso to rule 28 provides for this.

However many assesses are not very comfortable to use this since they fear department intervention.

So if credit is eligible to the recipient unit in full, any value can be charged, else use open market value 200 or 250 or 300 - similar transaction's value

4 Dated: 12-12-2021

I agree with Sh.Ganeshan Kalyani Ji and Madam Shilpi Jain.

5 Dated: 13-12-2021
By:- Ganeshan Kalyani

Thank you Sri Kasturi Sir.


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