Question109:
We are the manufacturer of Ice Cream with Brand Name `Creambell`. We are selling our products through distributors in PAN India. In this regards we provided Deep Freezers to the distributors on security and the ownership of deep freezers does not transferred to the distributors. Our query is that we have appointed a distributor in Sikkim and where there is no branch office of the company and ice cream sold from our plant to distrutor directly through IGST billing. Now we need to provide some deep freezers to the distributor or retailers by the Company on security. Please let me know, how to purchase deep freezer for Sikkim and how can get benefit of GST credit'' Please seek your valuable advise on this asap. Regards, Anuj Garg Creambell `The Great Taste`

Answer
 You can purchase deep freezer with Bill to ship to concept. But credit will not be allowed to you because you are not getting any consideration against renting of deep freezer. As per Schedule II Clause 1(b) any transfer of right in goods without transfer of title is a supply of service.

But service is provided by you without consideration. So credit will not be available to you.

If you can execute an agreement that supply of deep freezer is subject to certain turnover or assured order by the distributor then you can claim credit. It is same thing when a supplier give one item free on purchase of two. (Reply dt. 31/05/2018)