Question

XYZ (Trader in Maharashtra) is receiving filled cylinders of “Refrigerant Gas” from its own manufacturing unit at Gujarat. XYZ is re-selling these filled cylinders to the customers. The customer is sending back the empty cylinder to XYZ which in turn XYZ is sending back to their unit in Gujarat. Is XYZ liable to pay GST on the empty cylinders send back to Gujarat from their Maharashtra unit?

Answer

There are two possibilities of transaction in your case

(1) The tax is charged on the total value of Gas plus cylinder (Rs.10/Gas, Rs. 100/Cylinder)
(2) Tax is charged on Rs. 10 only and the security is deposited with the supplier Rs. 100 for cylinder.

GST will apply as follows:-
(1) As the tax is paid on Rs. 110 returning of cylinder will also be taxed Rs.100/cylinder
(2 The movement (returning of empty cylinder) of cylinder will be on challan and no tax will be charged on cylinderwala. (Reply dt.12/04/2019)