Question

A Delhi based Company is having a sales and marketing office in Mumbai. All goods are sold to the customers directly from Delhi. Mumbai office does not make any taxable supply and therefore not registered under GST. Does Mumbai office is required to raise bill on Delhi Office for sales and marketing services provided and to charge GST?

Answer

You have some staff in Mumbai office working for Delhi unit only and not providing any outward supply themselves.

Since Mumbai office is working only for Delhi unit only Therefore it is to be considered that they are supplying service to Delhi unit So as per Schedule I clause (2) Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business is treated as supply of service even if made without consideration.

Accordingly Mumbai office is required to get registered as it is providing sales and marketing services to Delhi unit in the course or furtherance of business and is taxable under GST as per Schedule I clause (2).

Further no person can issue taxable invoice unless it is registered under GST.

Please do Valuation as per Valuation Rule 28 of CGST Rules. (Reply dt.07/08/2018)