Question 119: We have a tie up unit for bottling of liquor. We have procured packing materials/bottles on payment of GST. We have not availed any ITC on the inputs (Packing Materials) procured by us.

Now our tie up contract had been cancelled and further we had made tie up contract with some another party for bottling of liquor.

Some Stock of GST paid Packing material are lying at our 1st tie up unit on which we have not availed any ITC on it.

We want to move these material to new tie up unit.
Please advise whether GST will be applicable on shifting of these material to 2nd tie up unit from 1st tie up unit.

Answer The bottling unit procured packing material on payment of GST but not availed ITC. Now the contract is shifted, so the packing material lying with 1st tie up is to be moved to 2nd tie up.

The treatment will depend on whether the packing material belongs to you or the tie up. If the material was sent on Bill to Ship to condition then it belongs to you and you can move it against challan with E- Way bill. But if the material was billed to 1st tie up then GST will apply even if the credit is not availed.

In this case since the packing material are purchased by the 1st tie up and used for taxable supply (for reselling against GST) he can take credit before September. (reply dt. 05/10/2018)