GST Commissioner Clarifies Challan
based Supply or Supply without Invoice not under GST
[Ref: Circular No.
10/10/2017-GST dated 18 October 2017]
Subject: Clarification on issues wherein the goods are moved within the State or from the State of registration to another State for supply
on approval
basis.
Various communications have been received particularly
from the suppliers of
jewellery etc. who are registered in one State but may have to visit other States (other than their State of registration) and need to carry the goods (such as jewellery) along for approval.
In
such cases if jewellery etc. is approved by
the buyer, then the supplier
issues a tax invoice only
at
the time of supply. Since the suppliers are not able to ascertain their actual supplies beforehand
and
while ascertainment
of tax liability in
advance is a mandatory requirement
for registration as a casual taxable person, the supplier is not able to register as a
casual taxable person. It has also been represented that such goods are also carried within the same State for the purposes of supply. Therefore, in exercise of the powers conferred under section 168 (1)
of the Central Goods and Services Tax Act, 2017, for the purpose of uniformity
in the implementation of the Act,
it has been decided to
clarify this
matter as follows -
2.
It
is seen that clause (c) of sub-rule (1) of rule 55 of the Central Goods and Services
Tax
Rules, 2017 (hereafter referred as “the said Rules”) provides
that the supplier shall issue a delivery
challan for the initial transportation of goods where such transportation is for reasons other than by
way of supply. Further, sub-rule (3) of the said rule also provides that the said delivery
challan shall be declared as specified in rule 138 of the said Rules. It is also
seen that sub-rule (4) of rule
55 of
the said Rules provides that “Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be
issued at the time of removal of goods for the purpose of supply, the supplier shall issue a tax invoice after delivery of
goods”.
3.
A combined reading of the above provisions indicates that the goods which are taken for supply on approval basis can be moved from the place of business of the registered supplier to another place within the same State or to a place outside the State on a delivery
challan along with the e-way bill wherever applicable and the invoice may be issued at the
time
of delivery of goods. For this purpose, the person carrying the goods for such supply can
carry the invoice book
with him so that he can issue the
invoice once the supply is fructified.
4.
It
is further clarified that all such supplies,
where the supplier
carries goods from one
State to another and supplies them in a different State, will be
inter-state
supplies and attract
integrated tax in terms of
Section 5 of the Integrated Goods
and
Services Tax Act, 2017.
5.
It
is also clarified that this clarification would be applicable to all goods supplied under similar situations.
6.
It
is requested that suitable trade notices may be issued to publicize the contents
of this circular.
7. Difficulty, if any, in the implementation
of the above instructions may please be brought to
the notice of the Board.
CBEC - 20/16/03/2017-GST