{"id":8649,"date":"2025-02-24T18:31:56","date_gmt":"2025-02-24T18:31:56","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8649"},"modified":"2026-02-18T18:25:43","modified_gmt":"2026-02-18T18:25:43","slug":"inter-unit-transfers-job-work","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/","title":{"rendered":"GST Applicability on Inter-Unit Transfers, Job Work, Repair"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-7489\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/GST-.png\" alt=\"GST Electronic Ledger System\" width=\"867\" height=\"564\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/GST-.png 686w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/GST--300x195.png 300w\" sizes=\"(max-width: 867px) 100vw, 867px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dd5dee9d65a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dd5dee9d65a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#GST_Applicability_on_Inter-Unit_Transfers_Job_Work_Repairs_or_Return_of_Goods\" title=\"GST Applicability on Inter-Unit Transfers, Job Work, Repairs or Return of Goods\">GST Applicability on Inter-Unit Transfers, Job Work, Repairs or Return of Goods<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Transportation_of_Goods_for_Job_Work\" title=\"Transportation of Goods for Job Work : \">Transportation of Goods for Job Work : <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#How_goods_sent_on_an_approval_basis_were_treated_during_the_transition_to_GST\" title=\"How goods sent on an approval basis were treated during the transition to GST.\">How goods sent on an approval basis were treated during the transition to GST.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Movement_of_Goods_for_Repairs_or_Return_of_Goods\" title=\"Movement of Goods for Repairs or Return of Goods : \">Movement of Goods for Repairs or Return of Goods : <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Inter-Unit_Transfers_GST_Applicability\" title=\"Inter-Unit Transfers &amp; GST Applicability : \">Inter-Unit Transfers &amp; GST Applicability : <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Valuation_as_per_Rule_28\" title=\"Valuation as per Rule 28\">Valuation as per Rule 28<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Stock_Transfer_Between_Branches_Registered_Under_the_Same_GSTIN_If_in_the_Same_State\" title=\"Stock Transfer Between Branches Registered Under the Same GSTIN (If in the Same State): \">Stock Transfer Between Branches Registered Under the Same GSTIN (If in the Same State): <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Goods_Being_Transported_Without_a_Supply_eg_Exhibitions_or_Demonstrations\" title=\"Goods Being Transported Without a Supply (e.g., Exhibitions or Demonstrations): \">Goods Being Transported Without a Supply (e.g., Exhibitions or Demonstrations): <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Zero-rated_Supply_Clarification\" title=\"Zero-rated Supply Clarification:\">Zero-rated Supply Clarification:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#General_Points_for_All_Scenarios_Mandatory_Details_in_Delivery_Challan\" title=\"General Points for All Scenarios: Mandatory Details in Delivery Challan:\">General Points for All Scenarios: Mandatory Details in Delivery Challan:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/inter-unit-transfers-job-work\/#Inter-State_Supply_Intra-State_Supply\" title=\"Inter-State Supply &amp; Intra-State Supply\">Inter-State Supply &amp; Intra-State Supply<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"GST_Applicability_on_Inter-Unit_Transfers_Job_Work_Repairs_or_Return_of_Goods\"><\/span><span style=\"color: #000080;\"><strong>GST Applicability on Inter-Unit Transfers, Job Work, Repairs or Return of Goods<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Transportation_of_Goods_for_Job_Work\"><\/span><span style=\"color: #000080;\">Transportation of Goods for Job Work : <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Goods can be sent by the principal (owner of goods) to a job worker for processing, repair, or any work that transforms or enhances the goods. (Rules 45 and 55 of the CGST Rules, 2017).<\/p>\n<p>Documentation: A delivery challan must accompany the goods. Details such as description, quantity, and purpose (e.g., &#8220;For Job Work&#8221;) must be mentioned. The principal must report such goods in Form ITC-04.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_goods_sent_on_an_approval_basis_were_treated_during_the_transition_to_GST\"><\/span><span style=\"color: #000080;\">How goods sent on an approval basis were treated during the transition to GST.<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Goods Sent for Testing or Approval: Goods can be transported for quality checks, testing, or approval before finalizing a transaction. This is often done when goods need to be certified or validated by the buyer or an external agency.<\/p>\n<p>Documentation: Delivery Challan with the description of goods and the purpose (e.g., &#8220;For Testing\/Approval&#8221;). The location of the testing\/approval center must be mentioned. No GST liability arises unless the goods are eventually supplied or sold. Some key takeaways for goods sent on an approval basis:<\/p>\n<ul>\n<li>Return within 6 Months:\u00a0No GST is payable if goods sent on approval before 1st July 2017 are returned within six months from GST implementation. This period could be extended by an additional two months if justified.<\/li>\n<li>Return after 6 Months:\u00a0If the goods are returned after six months, both the buyer (returning the goods) and the seller will be liable to pay GST.<\/li>\n<li>Invoice Requirement:\u00a0An invoice must be issued at the time of supply or within six months from the date of removal, whichever is earlier.<\/li>\n<li>Compliance Requirement:\u00a0Businesses were required to declare details of such goods in FORM GST TRAN-1 within 90 days of GST implementation.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Movement_of_Goods_for_Repairs_or_Return_of_Goods\"><\/span><span style=\"color: #000080;\">Movement of Goods for Repairs or Return of Goods : <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Goods needing repair or servicing can be transported under a Delivery Challan. Similarly, repaired goods being returned to the original owner may also use the same process.<\/li>\n<li>Documentation: Delivery Challan mentioning &#8220;For Repairs&#8221; or &#8220;Return after Repairs.&#8221; Reference to the original invoice, if available, should be included. The repaired goods should ideally return to the sender within a reasonable time.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Inter-Unit_Transfers_GST_Applicability\"><\/span><span style=\"color: #000080;\">Inter-Unit Transfers &amp; GST Applicability : <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Transportation of Semi-Finished Goods Between Two Branches: Manufacturing businesses often need to transfer semi-finished goods to another branch or facility for further processing.<\/li>\n<li>Documentation: Delivery Challan mentioning &#8220;For Further Processing&#8221; or &#8220;Semi-Finished Goods.&#8221; Include details of both branches&#8217; GSTIN and addresses. GST may apply if the transfer is between branches registered in different states (treated as distinct persons).<\/li>\n<li>Since separate GST registrations are treated as distinct persons, any inter-unit transfer between such registrations qualifies as a &#8220;supply&#8221; under GST, even if made without consideration (as per Schedule I of CGST Act, 2017). IGST applies to inter-state transfers, while CGST &amp; SGST apply to intra-state transfers.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Valuation_as_per_Rule_28\"><\/span><span style=\"color: #000080;\">Valuation as per Rule 28<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Open Market Value is the primary method. If open market value is unavailable, the value of similar goods\/services should be used. If neither is available, Rule 30 (110% of cost) or Rule 31 (best judgment) is used. If the recipient is eligible for full ITC, the invoice value is deemed as OMV, reducing the valuation complexity.<\/li>\n<li>Input Tax Credit Considerations: ITC is allowed if conditions under Section 16 of the CGST Act are met. Any restriction on ITC (e.g., non-payment of supplier\u2019s tax) can impact credit eligibility.<\/li>\n<li>Advance Rulings Precedents:<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Sanghvi Movers Ltd. (Maharashtra AAR): Crane movement between branches for further supply on hire is a taxable supply.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>In the case of Sanghvi Movers Ltd. (Tamil Nadu AAR): ITC was denied due to incomplete payment to the supplier, reinforcing the importance of full compliance for availing ITC.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Stock_Transfer_Between_Branches_Registered_Under_the_Same_GSTIN_If_in_the_Same_State\"><\/span><span style=\"color: #000080;\">Stock Transfer Between Branches Registered Under the Same GSTIN (If in the Same State): <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Goods moved between two locations of the same GST registration in a single state can be done without a tax invoice.<\/p>\n<p>Documentation: Delivery challan mentioning &#8220;Stock Transfer.&#8221; The GSTIN of the sender and receiver must be the same. This avoids treating the movement as a &#8220;supply,&#8221; provided both branches are under the same GST registration.<\/p>\n<p>Valuation rules under Rule 28 of the GST Act, particularly for stock transfers between related entities (such as head office and branches). If a head office supplies goods to its branch at zero value, no GST is payable, but the branch cannot claim ITC. If GST is charged on the invoice, ITC can be availed by the recipient branch, subject to conditions under Sections 16 &amp; 17 of the GST Act. Key takeaways on valuation rules under Rule 28 of the GST Act.<\/p>\n<ul>\n<li>First Proviso to Rule 28: If goods are supplied to a recipient for further supply as such, the supplier has the option to value them at 90% of the price that the recipient charges its unrelated customer. This is an option, not a mandatory requirement.<\/li>\n<li>Second Proviso to Rule 28: If the recipient is eligible for full Input Tax Credit (ITC), the invoice value itself is deemed to be the open market value of the goods or services. Unlike the First Proviso, it is not limited to goods meant for further supply, meaning it applies even when the recipient uses the goods for business purposes.<\/li>\n<li><span style=\"color: #000080;\"><strong>Impact on Stock Transfers:<\/strong> <\/span>A Head Office (HO) can value stock transfers to branches at any declared value (including zero) if the recipient branch is eligible for full ITC. If the invoice value is zero, no GST is charged, and consequently, no ITC is available to the recipient branch.<\/li>\n<li>Section 16 &amp; Section 17(1) of the GST Act: ITC is only available if the recipient has a valid tax invoice with GST charged. If goods are used partly for business and partly for other purposes, ITC is restricted proportionally.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Goods_Being_Transported_Without_a_Supply_eg_Exhibitions_or_Demonstrations\"><\/span><span style=\"color: #000080;\">Goods Being Transported Without a Supply (e.g., Exhibitions or Demonstrations): <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Goods moved for display or promotional purposes at exhibitions or for demonstrations do not constitute a supply since there is no consideration involved. This CBIC clarification reinforces key principles of GST regarding &#8220;supply&#8221; and tax implications for goods sent to exhibitions:<\/p>\n<p>Definition of Supply: A transaction is considered a &#8220;supply&#8221; under GST only if:<\/p>\n<p>a) It is made for consideration (i.e., there is payment involved).<br \/>\nb) It is made in the course of business advancement.<\/p>\n<p>Goods Sent to Exhibitions (Not a Supply): If goods are sent for display at an exhibition, even involving interstate movement, they do not qualify as &#8220;supply&#8221; because:<\/p>\n<ol>\n<li>a) There is no consideration (no sale or payment).<\/li>\n<li>b) The movement is not for business expansion but for exhibition purposes.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Zero-rated_Supply_Clarification\"><\/span><span style=\"color: #000080;\">Zero-rated Supply Clarification:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Defined under Section 16 of the IGST Act, 2017 : GST defines zero-rated supply as applicable only to:<\/p>\n<ol>\n<li>Exports of goods\/services.<\/li>\n<li>Supplies to Special Economic Zone (SEZ) developers or units.<\/li>\n<\/ol>\n<p>Supplies to SEZs are treated as zero-rated. and Input Tax Credit (ITC) is available on zero-rated supplies.\u00a0A Special Economic Zone (SEZ) is a designated area with different trade laws to encourage global competitiveness. Since goods sent for exhibition do not constitute a &#8220;supply,&#8221; they do not qualify for zero-rating under GST.<\/p>\n<p>Documentation Requirement: Instead of a tax invoice, the consignor must issue a delivery challan while removing goods for transportation. And the delivery challan should clearly mention that the goods are meant for exhibition and will be returned after the event.<\/p>\n<p>As the movement is covered only by a delivery challan (without an invoice or payment), there is no legal obligation for GST payment. GST law does not specify a detailed procedure for this, but businesses should ensure proper documentation to avoid any compliance issues.<\/p>\n<p>Documentation: Delivery Challan stating &#8220;For Exhibition&#8221; or &#8220;For Demonstration.&#8221; Include details of the event\/location where the goods will be displayed. Such goods must be brought back or accounted for in case of damage or loss.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"General_Points_for_All_Scenarios_Mandatory_Details_in_Delivery_Challan\"><\/span><span style=\"color: #000080;\">General Points for All Scenarios: Mandatory Details in Delivery Challan:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Date and number of the challan.<\/li>\n<li>Names, addresses, and GSTINs (if applicable) of both consignor and consignee.<\/li>\n<li>Description and quantity of goods.<\/li>\n<li>Purpose of transport.<\/li>\n<li>Place of delivery and vehicle details (if applicable).<\/li>\n<\/ul>\n<p>E-Way Bill: An E-Way Bill is mandatory if the value of the goods exceeds \u20b950,000 or as per state-specific thresholds, even when using a Delivery Challan.<\/p>\n<p>Retention and Record-Keeping: Delivery challans must be retained by the consignor, consignee, and transporter for audit purposes.<\/p>\n<h3 data-start=\"2956\" data-end=\"3007\"><span class=\"ez-toc-section\" id=\"Inter-State_Supply_Intra-State_Supply\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2959\" data-end=\"3005\">Inter-State Supply &amp; Intra-State Supply<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"3009\" data-end=\"3222\">\n<li data-start=\"3009\" data-end=\"3116\">Inter-State Supply\u2014Supply between two different states or union territories, attracting IGST.<\/li>\n<li data-start=\"3117\" data-end=\"3222\">Intra-State Supply\u2014Supply within the same state or union territory, attracting CGST &amp; SGST.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>GST Applicability on Inter-Unit Transfers, Job Work, Repairs or Return of Goods Transportation of Goods for Job Work : Goods can be sent by the principal (owner of goods) to a job worker for processing, repair, or any work that transforms or enhances the goods. (Rules 45 and 55 of the CGST Rules, 2017). Documentation: &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[144],"tags":[896],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8649"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8649"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8649\/revisions"}],"predecessor-version":[{"id":8651,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8649\/revisions\/8651"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}