The Authority for Advance Rulings (AAR), Gujarat has held that e way bill is mandated on the transfer of raw material, semi-finished, finished, and capital goods between the two units under the same GST registration and no exemption for the same.
The applicant M/s. Crown Craft India Private Limited, engaged in the manufacture of Thermocol, PET Bottles, Tableware, Kitchenware & Tiffin, Toilet ware and Plastic casserole, Steel ware Household, Plastic Chair and Flask with inner steel falling under chapter heading Nos. 392190, 392330, 392410, 392490, 732393, 940370 & 961700 respectively. They are availing Input Tax credit on Capital Goods, Inputs as well as Input services used in or about the manufacture of the final product as per the provisions of GST Act. 2017 and rules made.
The applicant contended that the new unit was under a single registration number under GST Act,2017 and the goods and raw materials would move from one factory to another for the purpose of further working on the semi-finished goods, packing would not fall under “supply of goods” as there was a total absence of recipient of the goods.
The applicant stated that such movement would not attract any GST therefore there will not be any transaction for sale, mortgage, transfer of property involving any kind of value between the two units.
The Authority comprising Vikas Kumar Jeph Member (Central Tax) and M. S. Kavia Member (State Tax) viewed that as far as value for E-way bills if that is to be issued for the transfer of goods from one unit to other is concerned, we find that being not a ‘supply’, no GST would attract on such movement, therefore there will not be any transaction for sale, mortgage, transfer of property involving any kind of value between the two units. Thus,
The Tribunal observed that for the transfer of the goods between two units they would have to take the value of such goods as explained in Explanation-2 to Sub-Rule (1) of Rule 138 of the CGST Rules, 2017 and issue an E-way bill for such transfer.
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