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Treatment of Branch transfers under GST to different state

CRR RR (42 Points)

16 January 2025

Hi Sir/Madam

A Company has GST registrations in two different states as it has a godown in another state

How to show interstate branch transfers in GSTR 1
Is threre any Pricing method suggested by GST Act/Rule

Request you to advise

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2 Replies

Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (8219 Points)
Replied 17 January 2025

To show interstate branch transfers in GSTR-1, you'll need to follow these steps:

Interstate Branch Transfers in GSTR-1

1. _Report transfers as supplies_: Treat interstate branch transfers as supplies, even if there's no consideration involved.

2. _Use Table 4A_: Report these transfers in Table 4A of GSTR-1, which is meant for reporting supplies made to other registered persons (including branches).

3. _Provide branch details_: Mention the GSTIN of the receiving branch and the state where the branch is located.

4. _Value of supply_: Determine the value of the supply using one of the methods prescribed under GST rules (explained below).

Pricing Methods for Interstate Branch Transfers The GST Act and Rules suggest the following pricing methods for interstate branch transfers:

1. _Open Market Value_: Value the goods at the open market price, which is the price at which the goods are ordinarily sold in the open market.

2. _Transaction Value_: Use the transaction value, which is the price actually paid or payable for the goods.

3. _Cost Plus Method_: Calculate the value by adding a reasonable margin to the cost of production or acquisition of the goods.

4. _Residual Method_: Use this method when the above methods cannot be used. This involves determining the value based on the information available.

Additional Considerations 1. _Documentation_: Maintain proper documentation, including transfer notes, invoices, and receipts, to support the valuation and reporting of interstate branch transfers.

2. _Reconciliation_: Reconcile the values reported in GSTR-1 with the values reflected in the financial statements to ensure accuracy and compliance.

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (8219 Points)
Replied 17 January 2025

To show interstate branch transfers in GSTR-1, you'll need to follow these steps:

Interstate Branch Transfers in GSTR-1

1. _Report transfers as supplies_: Treat interstate branch transfers as supplies, even if there's no consideration involved.

2. _Use Table 4A_: Report these transfers in Table 4A of GSTR-1, which is meant for reporting supplies made to other registered persons (including branches).

3. _Provide branch details_: Mention the GSTIN of the receiving branch and the state where the branch is located.

4. _Value of supply_: Determine the value of the supply using one of the methods prescribed under GST rules (explained below).

Pricing Methods for Interstate Branch Transfers The GST Act and Rules suggest the following pricing methods for interstate branch transfers:

1. _Open Market Value_: Value the goods at the open market price, which is the price at which the goods are ordinarily sold in the open market.

2. _Transaction Value_: Use the transaction value, which is the price actually paid or payable for the goods.

3. _Cost Plus Method_: Calculate the value by adding a reasonable margin to the cost of production or acquisition of the goods.

4. _Residual Method_: Use this method when the above methods cannot be used. This involves determining the value based on the information available.

Additional Considerations 1. _Documentation_: Maintain proper documentation, including transfer notes, invoices, and receipts, to support the valuation and reporting of interstate branch transfers.

2. _Reconciliation_: Reconcile the values reported in GSTR-1 with the values reflected in the financial statements to ensure accuracy and compliance.

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