GST Application on Intercompany and Intracompany Stock Transfers

Businesses with pan India transactions transfer stocks among its branches to meet delivery timelines for orders from diverse geographical locations.

In GST system, supply of goods incurs taxes despite payment of consideration or agreement of payment. Stock transfers can take place within the same state or between different states. The applicability of GST on intercompany and intracompany stock transfers depends on the following scenarios:

• Intracompany transfers – If the transferring and receiving units are within the same state and have the same GSTIN, GST is not applicable. To facilitate the transfer of goods, you must create a transfer order.

  If the transferring and receiving units are within the same state but have different GSTINs, GST is applicable. To facilitate the transfer of goods, you must create an intercompany sales order.

• Intercompany transfers – If the transferring and receiving units are different states but have the same GSTIN, GST is not applicable. To facilitate the transfer of goods, you must create a transfer order.

  If the transferring and receiving units are different states and have different GSTINs, GST is applicable. To facilitate the transfer of goods, you must create an intercompany sales order.

Related Topics

• Setting Up the India Localization SuiteTax Engine
• Tax Deduction at Source
• Tax Collection at Source
• Goods and Services Tax
• Electronic Invoicing for India
• Sending Customized Notifications
• Voiding Transactions for India

General Notices