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Captive consumption - gst invoice

LAKSHMI KANTH (TAX CONSULTANT) (449 Points)

30 May 2020

Sir, How do we raise the GST invoice for captive consumption ie when manufactures takes out certain goods towards usage in the office/factory purpose (self usage/self consumption)? Nothing was provided in the CGST Act vide section 31,32,33,34 and relevant rules also. Kindly advise.

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4 Replies

Mukund Thakkar (69 Points)
Replied 30 May 2020

Issue self invoice.and reverse ITC basis of consumption.

Himanshi Garg (Ca Article) (354 Points)
Replied 30 May 2020

Captive consumption by the same unit is not a supply. (it is part & process of manufacture) captive consumption by a another unit within same state is not taxable. captive consumption by a unit in another state is taxable.

So, there is no need to issue self invoice if the captive consumption is done by the same entity or another unit within the same state.
But, if captive consumption is done by a unit in another state then an invoice is required to be raised by you in the name of that entity considering it as Supply. And that entity will take ITC on your invoice

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 30 May 2020

In my Opinion it's Taxable.

Captive Consumption means the consumption of goods manufactured by one division and consumed by another division(s) of the same organization or related undertaking for manufacturing another product(s).

So it's as good as Purchase of Raw material for Receptient Unit & sale of Finished product by Supplier Unit.

Note : In my view it's not Exempted even if it is with state , because it is not sold straight away by Recepeint but it is being used in manufacturing to get finished goods.

Yes if it is other than captive consumption is Exempted , can be delivered on delivery challan (within state)

Kachmotors Pvtltd (2 Points)
Replied 23 January 2023

Sir, How do we raise the GST invoice of Tools/Dies developed (but physically not exported) for foreign customers and use as captive consumption i.e. usage in the factory purpose (self-usage/self-consumption) for the manufacture of goods in India for export?

Kindly advise

J.L Joshi