Important Disclosure for Multi State GSTN

- Sales Tax - Soham Mashruwala

There is a lot of controversy regarding common services and cross charging under the GST law. This is a major disaster for entities that have GST registration numbers in more than one state. It would be a great relief if the officers of the account come out of the tendency to treat every trader as if they are a victim and collect taxes. ASMT-10 is currently given by the government and raises issues as per mind. Circular No. 199/11/2023- GST dated 17-7-2023 dated 17-7-2023 for units having Kher Raja-Waja and Bandra Multi State GSTIN has given certain clarifications reversing the advance ruling in Columbia Esya Hospital. This matter is discussed in today's article.

Appendix I

Schedule I of the GST Act provides that even when no consideration is paid, certain specific transactions will be treated as supply where the same entity is registered in more than one State and is included in the Distinct Person as per Section 25. Thus, when the head office is serving its branch, even if there is no substitute at the time, a dispute arises as a free supply. To overcome all these various complex questions have been answered by the government through circular 199/11/2023- GST.

Round of circulars

1. Q: Is ISD registration mandatory for multi state GSTIN unit? As per clarification circular provision of ISD is not mandatory and the head office can also issue its tax invoice to the branch when common services are received and benefited by different branches.

2. Question: What to do about the amount in the case where taxes are received and can be demanded?

Explanation There is a provision in Section 15 for determining the amount of supply under which the rules are framed. As per the provisions of Rule 28, when the tax is payable in full, the amount from which the tax invoice is made will be considered as the value of the supply. If no such tax invoice is issued by HO Rs. 0 shall be deemed to have been transferred and the same shall be treated as a substitute for supply.

3. Q. Should the employee's salary be considered as common service when it is not eligible for tax?

Explanation It is not mandatory for the HO to include the salary amount of the employee in the computation of internally generated service.

Thus, in case of multi-state GSTIN, this is a relief for businesses where tax credits are not available like restaurants, dispensaries, etc. When a state has a single tax, there is no need to share common services. The law should be changed in this regard.