Applicability of gst

This query is : Resolved

srinath (Querist)
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19 May 2018 Hello everyone.

As per Section 7(1)(c) of the CGST Act, read with Schedule I of the Act, Supply includes “Supply of goods and/or services between related or distinct persons as specified in Section 25, without any consideration, made in the course or furtherance of business”.

My doubt:

One of our clients makes payment to the Suppliers on behalf of the Mumbai & Gurgaon office for the expenses incurred at the respective places, where the branches have separate GST registration. However, there is no separate books are maintained at the respective branches, since, the Chennai Office maintains and prepares all the required documents, accounts in one single TALLY package.

Note 1: Invoices raised are in the name of respective branches.
Note 2: ITC are availed only by the branches.

In this background, Can this transaction be treated as Supply between related/distinct person, though the Chennai Office directly making payment to the Supplier?

I understand that in the earlier Indirect tax regime, such offices will be treated as same person as there was centralized registration for all such branches/offices and hence services between such offices/branches were kept out of the tax bracket.

Now, after implementing the GST, such offices which have separate registration, the same will be treated as distinct person and any supply of goods and/or services, between them will be covered under GST.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 May 2018 Making payment will not be treated as Supply between related/distinct person.

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