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TMI Blog2022 (6) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitute 'supply, as these units are not distinct person to each other due to single registration - In the present case, for a transaction to be a 'supply', the essential criteria to be satisfied in the involvement of consideration, with the only exceptions being the activities mentioned in Schedule I and import of services. Thus, in the present case being unit transfer of raw material, semi-finished, finished, capital goods; there no consideration is involved and the activity is neither specified in Schedule I nor in the nature of import of services, the activity i.e. movement of raw material, semi-finished, finished, capital goods between the two units under same GST registration number shall not be a 'supply' under the provisions of the GST Act, 2017 - in the present case no liability of GST would arise for such of raw material, semi-finished, finished, capital goods between two units within the state and working under same GSTIN. Consideration of value for E-way bills if that is to be issued for transfer of goods from one unit to other - HELD THAT:- The applicant is not exempted to generate e-way bill for the movement of capital goods, raw material or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lects in Electronic Credit Ledger. Credit in Electronic Credit Ledger can be used only for payment of tax. The electronic credit ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credit on the common portal and ever)' claim of input tax credit will be credited to this ledger. The amount available in the electronic credit ledger can be used for making any payment towards output tax. The applicant would be able to use the eligible credit of inputs and capital goods for payment of GST for the goods cleared from other unit as there is only one electronic ledger for the credit of both the units having same GST number. Hence, applicant would be able to use this credit for discharging their GST liability from either of the units. Under which related to factory address in respect of purchase of raw material by these units? - HELD THAT:- As per sub section (2) of the section 97 of the CGST Act, 2017, the applicant can seek the advance ruling on the questions as mentioned in the sub section (2) only - As the question of the applicant does not fall under the category mentioned in the sub section (2) of the section 97 of the CGST Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax credit on Capital Goods, Inputs as well as Input services used in or in relation to manufacture of our final product as per the provisions of GST Act. 2017 and rules made thereunder. They are having their manufacturing unit situated at F-668 to 670, 9F2, VK.L Area, Jaipur, Rajasthan 302013 (hereinafter also called as the first unit). Presently they are carrying out all functions viz. receipt of inputs, capital goods, input services, manufacture of final goods as well as dispatch of final goods from their registered premises. Further they are planning to expand operation of their company by increasing capacity to manufacture the finished goods. Further since the space in present registered premises is limited, therefore, they are planning to establish a new unit within the Jaipur district (within Rajasthan). The new unit would be manufacturing similar goods as they are manufacturing in present registered premises. The new unit would also be used to manufacture semi-finished goods which may be sent to their first unit for finishing and further sale to customers. It is submitted that the following situations would emerge as a result of setting up new unit within the Jaipur Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state and working under same GSTIN. 2. If we have to issue challan for transfer of goods from one unit to other what value is to be considered for E-way bills if that is to be issued? Interpretation: As mentioned above and as per our interpretation, such movement of capital goods, raw material or finished goods between our two factories would not attract any GST therefore there will not be any transaction for sale, mortgage, transfer of property involving any kind of value between the two units. Thus, for transfer of the goods between two units we would have to take a notional value of such goods and issue an E-way bill for such transfer (if required depending on value of such transferred goods). 3. In respect of movement of raw material/capital goods/ semi-finished goods for further processing would the provisions of job-work apply or we can send these goods on simple internal challan? interpretation: We understand that sending of raw- material, semi-finished goods or capital goods to the other unit or vice versa would attract provisions of section 143 of the C.G.S.T. Act. 2017. For the movement of the goods we would have to follow the procedure as laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him which are used or intended to be used in the course of furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. From the plain reading of the above provisions it is clear that we would be eligible for ITC credit in respect of goods and services received by us. However, it is also mentioned in the provisions that the same would be credited to our electronic credit ledger. The situation arising in our case is that since we would be having single GST No. for both the units then as per the section 16(1) there would be only one ledger for the ITC credit. In such circumstances, would we be able to use the credit of our electronic credit ledger to discharge our GST liability for either of the unit or there would be any restriction. In other words, would the applicant be able to use the credit of inputs and capital goods for payment of GST tor the goods cleared from other unit. In our understanding since there is only one electronic ledger for the credit therefore, we would be able use this credit for discharging our GST liability from either of the unit as for all practical purposes as we are having one GST No. 6. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e can send these goods on simple internal challan? 4. In respect of the above situation in question No. 1, would we require to issue E-way bill for such movement of goods from our one unit to other if the value of the goods to be moved is higher then the threshold limit required for issue of E-way bill in normal course. 5. will; would have to deal with the ITC available for each unit? We understand that since the two units would have same GSTIN then in such case we would have to maintain single ITC credit and the same would be used for discharge of our GST liability irrespective of the clearance of goods from either of the factory. Thus, can we use ITC for the goods/raw material capital goods received in one factory for payment of GST for the clearance made from second unit? 6. For purchase of raw material/ capital good do we have to order and mentioned separate factory address? 7. For invoice of clearance of goods does the applicant have to mention both addresses or the address of the concerned unit from which the goods are cleared? C. PERSONAL HEARING In the matter personal hearing was granted to the applicant on 12.04.2022. Shri Madhu Sudan Sharma, Authoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material/ capital good do we have to order and mentioned separate factory address? Ans .: Yes, separate factory address have to be mentioned in purchase invoice. 7. For invoice of clearance of goods does the applicant have to mention both addresses or the address of the concerned unit from which the goods are cleared? Ans .: The address of the concerned unit from which the goods are cleared have to be mentioned in invoice. E. FINDINGS, ANALYSIS CONCLUSION: 1. We have perused the records on file and gone through the facts of the case and the submissions made by the applicant as well as the department. On the basis of submission made, we are of the view that the applicant i.e. M/s. Crown Craft india Private Limited., F-668,670 9F2, VKI Area, Jaipur (GST registration No. 08AAACC6867C1ZP) are engaged in the manufacture of (i) Thermocol, (ii) PET Bottles, (iii) Tableware, Kitchenware Tiffin, (iv) Toilet ware and Plastic casserole, (v) Steel ware Household, (vi) Plastic Chair and (vii) Flask with inner steel. 2. As per written submission made by the applicant, it is of the view that due to limited space at their present factory, they are planning to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om which the goods are cleared? 4. We will take up all the above questions for discussion one by one. The first question pertains to registration of new unit (situated within the Rajasthan state) and livability of GST on movement of goods/raw material/ capital goods from present unit (i.e. F-668,670 9F2, VKI Area, Jaipur) to new unit and vice versa. The relevant legal provisions are as under: Section 25 of the CGST Act, 2017: Procedure for registration.- (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory' in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business: [Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one by showing one of the two place of business as principal place of business and other as additional place of business. In the present case, the applicant intends to establish a new unit within the Jaipur district (within Rajasthan). The new unit would be manufacturing similar goods as they are manufacturing in their present registered premises. The applicant does not want to take separate registration of this new unit. Thus, as per Sub-Section (2) of Section 25 of the CGST Act, 2017, the applicant does not require to obtain separate registration of their new unit (to be established) and can work with single registration allotted to present unit. As present unit and new unit will have same registration, therefore they are not distinct person as per Sub-Section (4) of Section 25 of the CGST Act, 2017. As far as supply of goods or services or both between these two establishment of applicant is concerned, we find that movement of goods/raw material/ capital goods from present unit (i.e. F-668,670 9F2, VKI Area, Jaipur) to new unit and vice versa does not constitute 'supply, as these units are not distinct person to each other due to single registration. In the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an, as the case may be, issued in respect of the said consignment and also includes the central tax, State or Union territory tax, integrated tax and cess charged, if any, in the document and shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply of goods. Further, the provisions related to exemption from issuance of e-way bill is described in Sub-rule (14) of the Rule 138 of the CGST Rules. 2017, which is reproduced as under: - (14) Notwithstanding anything contained in this rule, no e-way bill is required to be generated,- (a) where the goods being transported are specified in Annexure: (b) where the goods are being transported by a non-motorised conveyance: (c) where the goods are being transported from the customs port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs: (d) in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule 138 of the Stale or Union territory Goods and Services Tax Rules in that particular State or Union territory; (e) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed petroleum gas are being moved for reasons other than supply.] Keeping in view the above legal provisions, we are of the view that applicant is not exempted to generate e-way bill for the movement of capital goods, raw material or finished goods to be made between their two units. Further, as far as value for E-way bills if that is to be issued for transfer of goods from one unit to other is concerned, we find that being not a 'supply', no GST would attract on such movement, therefore there will not be any transaction for sale, mortgage, transfer of property involving any kind of value between the two units. Thus, we find that for transfer of the goods between two units they would have to take a value of such goods as explained in Explanation-2 to Sub-Rule (1) of the Rule 138 of the CGST Rules, 2017 and issue an E-way bill for such transfer (if required depending on value of such transferred goods). 6. Now, we are required to discuss the third question of the applicant under which it is to decide whether movement of raw material/capital goods/ semi-finished goods for further processing would the provisions of job-work apply or they can send these goods on simple in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or result in a supply of goods or services or both, within the meaning of that term. As per sub section (2) of the section 97 of the CGST Act, 2017, the applicant can seek the advance ruling on the questions as mentioned in sub section (2) only. As the question No. 4 (Forth) of the applicant does not fall under the category mentioned in the sub section (2) of the section 97 of the CGST Act, 2017 therefore, no answer is being given. 8. Now, we are required to discuss the Fifth question of the applicant under which it is to decide whether applicant can us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her of the units. 9. Now, we are required to discuss the Sixth question of the applicant under which related to factory address in respect of purchase of raw material by these units. In this regard, we have to first examine whether the above question falls under the ambit of questions as mentioned in Section 97(2) or otherwise. 97. Application for advance ruling ,- (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input lax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sthan Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions of the applicant are answered thus: Question 1: Since our present and new unit (situated within the Rajasthan state) would have same GSTIN therefore sending goods/ raw material/ capital goods from one unit to other would not comprise supply of goods or services. In such circumstance would we require to pay GST on such movement of goods/raw material/ capital goods? Answer : Being same GSTIN of both the units (present new unit), there is no occurrence/constitution of 'supply' in respect of movement of raw material, semi-finished, finished, capital goods between these two units within the state. Therefore, no liability of GST would arise for such movement between two units working under same GSTIN. Question 2: If we have to issue challan for transfer of goods from one unit to other what value is to be considered for E-way bills if that is to be issued? Answer : For transfer of the goods between two units, they would have to take a value of such goods as explained in Explanation-2 to Sub-Rule (1) of the Rule 138 of the CGST Rules, 2017 and issue an E- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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