Storing at cold storage

Hi Kaustubh,

This is a common scenario under GST when goods are stored at a third party’s cold storage before being transferred to the principal’s premises. Here's the detailed answer to your queries:

1) Is XYZ required to declare PQR’s premises as ‘Additional Place of Business’?

• Yes, XYZ must declare PQR’s cold storage premises as an Additional Place of Business (APOB) if XYZ is storing goods there.

• According to GST law, any location where stock is kept (owned by the taxable person) for business purposes is considered a place of business.

• Even if PQR is separately registered under GST (for their own services as a cold storage provider), XYZ is required to register the cold storage location as an APOB.

• This is because the goods belong to XYZ and are stored at PQR's premises temporarily on XYZ’s behalf.

2) If registered as Additional Place, can XYZ claim ITC of the entire amount at the beginning even if goods are received in piecemeal?

• Yes, XYZ can claim ITC on the purchase of raw materials immediately, as the goods are delivered directly to PQR’s cold storage, which is declared as APOB.

• ITC is eligible when goods/services are used or intended to be used for business.

• The physical location (APOB) where goods are stored does not restrict the ITC claim, even if the goods are taken out piecemeal from cold storage to XYZ’s premises later.

• The crucial point is that the goods are received at a place registered under XYZ’s GST (here, the APOB at PQR’s cold storage).

Summary:

Additional Notes:

• Ensure that the GSTIN of the APOB (PQR premises) is reflected in the purchase invoices.

• Maintain proper stock records and document the movement of goods between the APOB and XYZ’s main premises.

• Failure to declare APOB can lead to penalties and complications during GST audits.