Goods sent on approval basis..

Good morning Kamatchi!

Your query about transferring goods on approval basis to your service provider in Pondicherry without charging GST is a common scenario in GST. Let me break it down for you:

Key Points:

• You are registered in Tamil Nadu (TN).

• Your service provider is registered in Pondicherry.

• You want to transfer goods to service provider without GST and avoid separate registration in Pondicherry.

• Service provider stores goods and delivers to your customers based on your instructions.

• You will invoice customers directly from TN.

GST Treatment:

1. Transfer of Goods to Service Provider (Job Work or Storage)

• If goods are sent for job work or storage to a registered person in another state/UT, it is considered as inter-state transfer.

• Normally, inter-state supply attracts GST.

• However, if you send goods on approval or for job work, you can transfer without payment of GST by using Delivery Challan and following certain rules.

2. No Separate Registration Required

• As per GST law, if goods are sent to your job worker in another state/UT, you may not need separate registration in that state, provided:

  • You transfer goods on delivery challan.

  • Goods are returned after job work.

  • You maintain proper records.

3. Approval Sales & Delivery

• Since sales happen only after customer approves:

  • Goods sent on approval basis can be transferred to service provider using Delivery Challan (without GST invoice).

  • Once customer approves and sale happens, you raise sales invoice from your TN GST registration.

  • The service provider delivers goods to your customers on your behalf.

4. Separate Charges for Services

• Your service provider will charge you separately for:

  • Storage

  • Transportation

  • Other services

• These services are taxable under GST as services received from a supplier in another state (Pondicherry).

Summary & Steps:

Important:

• Maintain proper records of delivery challans.

• Make sure the service provider is GST registered.

• You may want to inform your GST officer or consultant for compliance clarity.

• If goods are not returned or sale happens in Pondicherry, separate registration may be needed.