One of our clients has a branch in madhya pradesh. Main branch is located in maharashtra. While purchasing goods from mp the employees in mp gave gstin of maharashtra branch. The itc is creditted to maharashtra. The client wishes to transfer the itc to mp branch since there is heavy liability in mp branch. What can be done in this case?
In this case, your client can show a stock transfer transaction between the main branch i.e. in Maharashtra and branch situated in Madhya pradesh (related party). By doing this this the main branch will charge GST from branch of Madhya Pradesh, and Madhya pradesh can take ITC on account of such stock transfer and can reduce its tax liability.