Question ID : 41020

CAPITAL GOODS - BRANCH TRF

Respected Expert kindly guide on the following scenario- Co is engaged in producing nil rated goods. It is having multiple branches in 4 states. For producing the nil rated goods it requires some machinery which is imported on maharashtra GSTIN - as per Bill of Entry in FY 2018-19. Now in April-2021 this machinery is required at the Gujrat Branch and therefore, we need the Trf the same. Query: Since all the purhcases are related to nil rated production we took the ITC in 3B and reversed it in Rule 42 + 43 in FY 2018-19 and capitalized the amt. Now in April-2021 branch trf being a outward supply for Maharashtra GSTIN - do I need to again charge GST on it? If yes - then can I re-avail the already reversed ITC and use it against the outward supply? If the ans is yes to above then no issues - but if Co is not eligible to re-avail the ITC then paying IGST on branch trf will only result in cascading effect. Any solution. Hope I am able to clear the facts. In case any additional information of facts is required - pl let me know. Kindly help. Thank you for your valuable time and advice.

Even in the case of Branch Transfer you have to charge GST and being the restriction on availment of credit on Capital good input cannot be claimed by you.