Clarification
on issues wherein the goods are moved within the State or from the State of
registration to another State for supply on approval basis
Circular No. 10/10/2017-GST
Various communications have been
received particularly from the suppliers of jewellery etc. who are registered
in one State but may have to visit other States (other than their State of
registration) and need to carry the goods (such as jewellery) along for
approval. In such cases if jewellery etc. is approved by the buyer, then the
supplier issues a tax invoice only at the time of supply. Since the suppliers
are not able to ascertain their actual supplies beforehand and while
ascertainment of tax liability in advance is a mandatory requirement for
registration as a casual taxable person, the supplier is not able to register
as a casual taxable person. It has also been represented that such goods are also
carried within the same State for the purposes of supply. Therefore, in
exercise of the powers conferred under section 168 (1) of the Central Goods and
Services Tax Act, 2017, for the purpose of uniformity in the implementation of
the Act, it has been decided to clarify this matter as follows –
2.
It
is seen that clause (c) of sub-rule (1) of rule 55 of the Central Goods and
Services
Tax Rules, 2017 (hereafter referred as “the said
Rules”) provides that the supplier shall issue a delivery challan for the
initial transportation of goods where such transportation is for reasons other
than by way of supply. Further, sub-rule (3) of the said rule also provides
that the said delivery challan shall be declared as specified in rule 138 of
the said Rules. It is also seen that sub-rule (4) of rule 55 of the said Rules
provides that “Where the goods being transported are for the purpose
of supply to the recipient but the tax invoice could not be issued at the time
of removal of goods for the purpose of supply, the supplier shall issue a tax
invoice after delivery of goods”.
3.
A combined reading of the above
provisions indicates that the goods which are taken for supply on approval
basis can be moved from the place of business of the registered supplier to
another place within the same State or to a place outside the State on a
delivery
challan along with the e-way bill wherever
applicable and the invoice may be issued at the time of delivery of goods. For
this purpose, the person carrying the goods for such supply can carry the
invoice book with him so that he can issue the invoice once the supply is
fructified.
4.
It is further clarified that all such
supplies, where the supplier carries goods from one State to another and
supplies them in a different State, will be inter-state supplies and attract
integrated tax in terms of Section 5 of the Integrated Goods and Services Tax
Act, 2017.
5.
It is also clarified that this
clarification would be applicable to all goods supplied under similar
situations.
