we are having pan India presence and frequently we need to shift our assets from one training centre to another (Inter state). Now My doubt is:
1.Whether tax would be applicable on transportation Charges or on the goods value.Since these assets have no commercial value.
2.If GST is applicable on total goods value,we don't have any invoices for these assets since assets were purchase in the year of 2011.
please help.if you can advise GST rule ,shall be highly solicited.
Under GST every registered branch is a separate person. So transfers between branches is taxable.
You have to charge tax on freight, there is no doubt in it.
Now the question is what should be the value of asset/goods transferred from one branch to another.
For this we have to refer section 15 of CGST Act, 2017.
Sub-section 1 talks about valuation where transfer is between unrelated person. But in your case the transfer is between related persons.
Definition of related person under GST
(a) persons shall be deemed to be “related persons” if––
Point vi above puts both branches as related person since both branches are controlled by same person (definition also includes legal person).
So to check valuation we have to refer to valuation rules issued by government.
As per these rules:
When the goods or services are delivered or sold or supplied to related person, then value of goods shall be:
Provided where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of goods or services.
Again if valuation is not possible under above rule then we need to check rule 3, 4 and 5.
In your case consider the value which you will be charging to a third party even if you will be selling the product as a scrap.
If still the value is nill, then charge Nil value in invoice. But be prepared to prove the valuation.
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