GST REGISTRATION AT ANOTHER STATE

Registration 324 views 3 replies

Devendra

23 Points Joined February 2023

Our client is registered in Maharashtra. Now they had to open a new franchise shop in Rajasthan as well. Hence they have made all purchases from various parties of capital goods - furniture for that Rajasthan shop under GST number of Maharashtra. (Delivery has taken place at the shop in Rajasthan. The shop is rented by the master company from which the franchise is taken.) The client has not yet obtained a GST number in Rajasthan. Also, no sale has been made yet. Now, for some reason, client has been put off doing business there, they have decided to sell these capital goods cost-to-cost to another party registered in Maharashtra. (All deliveries will take place at the shop in Rajasthan. No goods will be moved.)

1) Is IGST applicable or CGST/SGST applicable on such sale?

2) If the purchase made by us is delivered in Rajasthan, can ITC be taken in Maharashtra GST number?

3) Need to have a GST number in Rajasthan also to get ITC?

4) Now the person to whom we sell capital goods also needs a GST number in Rajasthan?

Replies (3)

Prajjwal

417 Points Joined December 2017

In this scenario, since the purchase was made under the GST number of Maharashtra and the sale is being made to a party registered in Maharashtra, CGST/SGST would be applicable on the sale of capital goods.

Yes, ITC can be taken in Maharashtra GST number if the purchase was made for business purposes and the goods were used for generating taxable output supplies.

No, having a GST number in Rajasthan is not necessary to claim ITC on the purchase of capital goods. However, the person claiming ITC must be registered under GST and the purchase should have been made for business purposes.

Devendra

23 Points Joined February 2023

Is Section 25(2) applicable?

Does the master company's property on rent constitute our fixed establishment in Rajasthan if we have a franchise agreement with the master company?

Does GST number need to be obtained even if only capital goods are purchased and no supplies are made in Rajasthan? Will ITC taken under Maharashtra GSTN be accepted?

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

1. IGST Applicable. As capital goods were purchased on the maharashtra GSTN.
2. No.... See when the Capital goods were purchased was billed at Maharashtra GSTN But Delivered at Rajasthan (Bill to Ship) . That means the capital goods were purchased for further delivery to Rajasthan not being consumed in maharashtra. In this you have to raise the bill to Rajasthan under model of Bill to Rajasthan & Despatch from .....
3. Yes . Actually person in Rajasthan must have GSTN & Can avail ITC on Bill raised from Maharashtra. (For capital goods).
4. No. Not required.

Note : The ITC on capital goods in Maharashtra GSTN is available only if further Bill for the same raised by maharashtra to Rajasthan.