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Stock Transfer – Intra and Inter-State

We will discuss the applicability of GST on Stock Transfer within and outside the state. We will also discuss the effect of this to reconciliation of GSTR-1 vs GSTR-3B vs Books of Accounts.

Intra-state stock transfer

As per GST law supply of goods by a taxable person to another taxable person or non-taxable person during furtherance of a business without consideration is also included within the ambit of ‘supply’.

But since stock is transferred within state (same GSTIN), there is no need to pay GST on that.

Inter-state stock transfer

In this case stock is transferred to same PAN but different GSTIN. Hence taxpayer needs to show these invoices in his GSTR-1 and pay the tax in GSTR-3B. On the other end, ITC can be availed for the tax paid.

Effect on Sales Reconciliation

In case of Inter-state stock transfer, taxpayer is required to show the invoices in GSTR-1 and pay tax. But in his books of accounts he will not show it as sales. So, there will be a mismatch in sales records.

To reconcile in this case, we have to download GSTR-1 invoice wise and consolidate it using the GSTR-1 Consolidator module of GST Doctor Software. Then we can remove the supplies made to same PAN and compare with the books of accounts with the instructions given on this page.

GST Audit Checklist

We have compiled most common mistakes detected during GST Audit and have linked detailed articles on those topics for your reference. To visit click on GST Audit Checklist.

ITC Matching Software

To match the ITC taken by the taxpayer with the invoices uploaded in GSTR-2A, you can use our software GST Doctor ITC Matching Software which is available on Microsoft Store.

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