Question

XYZ having manufacturing unit in Maharashtra and branch offices outside Maharashtra. Branch offices are receiving services locally as well as from outside state on which they avail credit. Since they are not supplying any goods or service,
1) They can issue an invoice in the name of Maharashtra unit by charging IGST as a service provider under ‘support service’.
2) But they cannot register as ISD. Is it correct?
3) Can they pass on credit of CGST + SGST + IGST availed by them or only IGST?

Answer

The Branch office outside Maharashtra is working only for Maharashtra unit. So that should be considered as supplier to Maharashtra Branch.

You have 2 choices:

To get unit registered as ISD. But in that case credit relating to services used by Maharashtra unit but arranged by ISD can be transferred only. Like ISD is arranging advertisement for Maharashtra unit.

But if this unit (Outside Maharashtra) is registered as Supplier then credit of all inputs, input services and capital goods can be availed by the unit and may be utilized by Maharashtra unit when the unit located outside Maharashtra will raise invoice to Maharashtra unit.

If the office is raising invoice as supplier then all types of credit (CGST, SGST, IGST) will be utilized. (Reply dt.06/11/2018)