Order Date - 19 May 2022

Facts – 

• The Applicant, M/s. Crown Craft India Private Limited., Jaipur, is engaged in the manufacture of Tableware, Kitchenware and Toilet ware etc. 
• The Applicants are planning to establish a new unit within Jaipur district only. The new unit would also be used to manufacture semi-finished goods which may be sent to their first unit for finishing and further sale to customers.

Issues - 

• Whether the new unit would work under single GST number as is provided under section 25 of the CGST Act, 2017? 
• Whether E-way bill must be issued for transfer of goods from one unit of other? 
• Whether the applicants can use Input Tax Credit (ITC) for the goods/raw material/capital goods received in one factory for payment of GST for the clearance made from second unit? 

Order – 

• The Authorities observed that as per Sub-Section (2) of Section 25 of the CGST Act, 2017, where a person has multiple establishments in a state, in such a case he shall be liable to take single registration in the state by adding establishment as additional place of business. 
• It was also observed that for transfer of the goods between two units, the applicants would have to take a value of such goods as explained in Explanation-2 to Sub Rule (1) of the Rule 138 of the CGST Rules, 2017 and issue an E-way bill for such transfer. 
• The applicant would be able to use the eligible credit of inputs and capital goods for payment of GST for the goods cleared from other unit as there is only one electronic ledger for the credit of both the units having same GST number. 
• Hence, it was held that being same GSTIN of both the units (present & new unit), there is no occurrence/constitution of 'supply' in respect of movement of raw material, semi-finished, finished, capital goods between these two units within the state. Therefore, no liability of GST would arise for such movement between two units working under same GSTIN.