Movement of Capital goods between distinct person not supply

Last updated: 04 August 2023
Quick Summary
The Maharashtra Appellate Authority for Advance Ruling (AAAR) ruled that the movement of capital goods between different GST-registered units of the same company is considered a lease transaction and is taxable as a supply of services. While the initial lease from the owning unit to another unit is a supply, the subsequent movement of goods by the lessee unit to a third unit is not considered a supply in itself. For valuation, if the recipient unit can claim full input tax credit, the value declared in the invoice will be accepted for GST purposes.

Court :
AAAR, Maharashtra

Brief :
The AAAR, Maharashtra, in matter of M/s Chep India Private Limited [Order No. MAH/AAAR/DS-RM/02/2023-24 dated June 05, 2023] held that the transaction between two GSTINs of same person would be considered as lease transaction and accordingly taxable as supply of services in terms of Section 7 of the Central Goods and Services Tax Act, 2017 ("the CGST Act").

Citation :
Order No. MAH/AAAR/DS-RM/02/2023-24 dated June 05, 2023

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Bimal Jain
Published in GST
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