Branch Transfers Between Your Own GSTINs: Valuation under GST Rule 28

If your business is registered under GST in more than one state, each registration is a “distinct person” under Section 25(4) of the CGST Act. Moving goods from one of your GSTINs to another is a supply under Schedule I, taxable even without consideration. Moving goods between two places under the same GSTIN — a factory and a warehouse in the same state — is not a supply at all.

Which document?

• Same GSTIN (within a state): a delivery challan (Rule 55) and an e-way bill where required. No tax.
• Different GSTINs, same PAN, intra-state (possible where you have more than one registration in a state, such as an SEZ unit or business vertical): tax invoice with CGST + SGST.
• Different GSTINs in different states: tax invoice with IGST, and an e-way bill.

Valuation under Rule 28

For supplies between distinct or related persons, the value is determined in this order:

1. The open market value of the supply.
2. If that is not available, the value of supply of goods or services of like kind and quality.
3. If neither is available, the value under Rule 30 (cost plus 10%) or Rule 31 (reasonable means consistent with the law).

Two provisos give practical relief:

• At the option of the supplier, where the goods are intended for further supply as such by the recipient, the value can be 90% of the price charged by the recipient to its customers who are not related.
• Where the recipient is eligible for full input tax credit, the value declared in the invoice is deemed to be the open market value.

The second proviso is the one most businesses rely on: if the receiving GSTIN can take full credit, the tax you charge on the transfer comes straight back as credit, so the law accepts the invoice value. The worksheet uses it first, then falls back through open market value, like-kind value and the 90% option, and tells you when you need Rule 30 or 31.

When full credit is not available

If the receiving branch makes exempt supplies or otherwise cannot take full credit, the invoice value is not automatically accepted. Then you need open market value or like-kind value, documented. Keep the working: price lists, recent sales to unrelated customers, cost sheets.

Services between branches

Services provided by one GSTIN to another — head office functions such as accounts, HR or IT — are also supplies between distinct persons. The CBIC has clarified that where the recipient is eligible for full credit, the value declared in the invoice (including a nil value in certain cases) can be accepted as open market value under the second proviso. Common credit on services received by the head office can also be distributed through an Input Service Distributor registration, which became mandatory for distributing such credit from April 2025. Take advice on the route that fits your structure.

Corporate guarantees

Rule 28(2) separately values corporate guarantees between related persons (generally 1% of the amount guaranteed per year, or the actual consideration if higher). If one entity in your group guarantees another's loan, account for it.

Using the worksheet

1. Enter each transfer with the sending and receiving GSTIN. The sheet reads the state codes and tells you if it is not a supply, intra-state or inter-state.
2. Enter the values you have and whether the recipient is eligible for full credit.
3. Use the suggested taxable value and tax, and keep the worksheet with your monthly GST file.

Bebaak handles branch addresses, warehouses and series per GSTIN, issues the tax invoice or delivery challan for branch transfers, and prepares the e-way bill JSON — see multiple GSTINs in Bebaak.

Worked example (illustrative)

A Delhi head office sends finished goods costing ₹4,50,000 to its Mumbai branch, which sells them to retailers and is eligible for full input tax credit. Because the recipient can take full credit, the invoice value of ₹4,50,000 is deemed to be the open market value under the second proviso to Rule 28. The Delhi GSTIN issues a tax invoice with IGST at 18% — ₹81,000 — and an e-way bill; the Mumbai GSTIN takes ₹81,000 as credit after it appears in its GSTR-2B. Had the Mumbai branch been making exempt supplies, the value would have had to follow open market value or the other methods.

Common mistakes

• Moving goods between GSTINs on a delivery challan.
• Valuing at an arbitrary figure without checking whether the recipient gets full credit.
• Forgetting the e-way bill.
• Not reconciling the receiving branch's credit with the sending branch's invoices.