Requirement to add Transport’s Place as additional place of business under
As per Rule 138 of the Central Goods and Services Tax (CGST) Rules, 2017 E-way bill is mandatory for the movement of goods from the supplier’s place of business to the recipient’s place of business.
However, it is difficult for few sectors like the textile sector to comply with this provision because they store their goods in the transporter’s godown due to storage problem in their place of business. The textile traders buy the goods and before receiving it at their place of business they ask the transporter to keep/store it in their godown. In this case the e-way bill validity is required to be extended till the time the goods reach the buyer’s place of business. To solve this particular issue a way out have been given to this sector by the Government vide Circular No. 61/35/2018-GST dated 04.09.2018.
The consignee/recipient taxpayer who stores his goods in the godown of the transporter has to add the transporter’s godown, with the concurrence of the transporter, as an additional place of business in his GST registration certificate. When the transporter’s godown is added by the consignee in his GST certificate the transportation under the e-way bill will be deemed to be concluded once the goods have reached the transporter’s godown. Hence e-way bill validity in such cases will not be required to be extended.
It is to be understood that Government is not putting any additional compliance requirement on the transporters by adding his godown as additional place of business of the consignee.
Further, if the goods are to be moved from the transporter’s godown which is added as an additional to another place of business of the consignee then e-way bill is required to be generated as this movement will be a new transaction.
Further, it is also given in the circular that the transporter shall continue to maintain accounts and records as specified in section 35 of the CGST Act read with rule 58 of the CGST Rules as a warehouse keeper. Furthermore, the consignee shall also maintain accounts and record as required under rules 56 and 57 of the CGST Rules. The consignee is also allowed to maintain accounts in relation to goods stored at transporter’s godown at his principal place of business.
Have a look at the Circular
Government of India
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 4th September, 2018
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)
The Principal Directors General / Directors General (All)
Subject: E-way bill in case of storing of goods in godown of transporter – regarding
Various representations have been received on the matter pertaining to the textile sector and problems being faced by weavers & artisans regarding storage of their goods in the warehouse of the transporter. It has been stated that textile traders use transporters’ godown for storage of their goods due to their weak financial conditions. The transporters providing such warehousing facility will have to get themselves registered under GST and maintain detailed records in cases where the transporter takes delivery of the goods and temporarily stores them in his warehouse for further transportation of the goods till the consignee/recipient taxpayer’s premises. The transport industry is facing difficulties due to the same and a request has been made to treat these godowns as transit godowns.
- In view of the difficulties being faced by the transporters and the consignee/recipient taxpayer and to ensure uniformity in the procedure across the sectors and the country, the Board in exercise of its power conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereafter referred to as the CGST Act) hereby clarifies the issues in the succeeding paragraphs.
- As per rule 138 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules) e-way bill is a document which is required for the movement of goods from the supplier’s place of business to the recipient taxpayer’s place of business. Therefore, the goods in movement including when they are stored in the transporter’s godown (even if the godown is located in the recipient taxpayer’s city/town) prior to delivery shall always be accompanied by a valid e-way bill.
- Further, section 2(85) of the CGST Act defines the “place of business” to include “a place from where the business is ordinarily carried out, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or Circular No. 61/35/2018-GST both”. An additional place of business is the place of business from where taxpayer carries out
business related activities within the State, in addition to the principal place of business.
- Thus, in case the consignee/ recipient taxpayer stores his goods in the godown of the transporter, then the transporter’s godown has to be declared as an additional place of business by the recipient taxpayer. In such cases, mere declaration by the recipient taxpayer to this effect with the concurrence of the transporter in the said declaration will suffice. Where the transporter’s godown has been declared as the additional place of business by the recipient taxpayer, the transportation under the e-way bill shall be deemed to be concluded once the goods have reached the transporter’s godown (recipient taxpayer’ additional place of business). Hence, e-way bill validity in such cases will not be required to be extended.
- Further, whenever the goods are transported from the transporters’ godown , which has been declared as the additional place of business of the recipient taxpayer, to any other premises of the recipient taxpayer then, the relevant provisions of the e-way bill rules shall apply. Hence, whenever the goods move from the transporter’s godown (i.e, recipient taxpayer’s additional place of business) to the recipient taxpayer’s any other place of business, a valid e-way bill shall be required, as per the extant State-specific e-way bill rules.
- Further, the obligation of the transporter to maintain accounts and records as specified in section 35 of the CGST Act read with rule 58 of the CGST Rules shall continue as a warehousekeeper. Furthermore, the recipient taxpayer shall also maintain accounts and records as required under rules 56 and 57 of the CGST Rules. Furthermore, as per rule 56 (7) of the CGST Rules, books of accounts in relation to goods stored at the transporter’s godown (i.e., the recipient taxpayer’s additional place of business) by the recipient taxpayer may be maintained by him at his principal place of business. It may be noted that the facility of declaring additional place of business by the recipient taxpayer is in no way putting any additional compliance requirement on the transporters.
- It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
- Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.