GST & Indirect TaxUpdated 5 October 2026

Branch Transfer of Capital Goods Between GSTINs: Valuation, E-Way Bill and ITC Workflow

By Ravi Sisodia · Reviewed by CA Divyanshu Sengar · Updated 5 October 2026

2-minute summary

Distinct-person treatment turns an internal physical move into a GST supply.
Rule 28 valuation should be documented; where the recipient is eligible for full ITC, the invoiced value can benefit from the deeming rule in the valuation framework.
Asset identifiers and depreciation records must stay aligned with the tax invoice and recipient capitalisation.
Movement documentation and e-way-bill applicability should be checked separately from valuation.

Current position

A transfer of capital goods between two GST registrations of the same PAN is a supply between distinct persons when made in the course or furtherance of business, even if no money changes hands. The finance team must therefore coordinate Rule 28 valuation, tax invoice, e-way-bill/document movement, fixed-asset registers and recipient ITC rather than record only an internal asset transfer.

Control and evidence map

#	Control / evidence requirement
1	Approve the inter-GSTIN transfer with asset number, location and business reason.
2	Determine Rule 28 value and recipient full-ITC status before invoicing.
3	Issue the tax document and generate transport/e-way-bill records where required.
4	Update both fixed-asset registers using the same serial/asset identifier.
5	Reconcile output tax at transferor with ITC booked by transferee and physical receipt.

Worked example

A company moves a production machine from its Karnataka GSTIN to its Tamil Nadu GSTIN. The machine has a net book value of Rs. 18 lakh but an open-market comparable is higher. Finance should not use book value by habit. It should record the Rule 28 basis, issue the inter-State tax invoice, link the vehicle/e-way-bill documentation and ensure the Tamil Nadu unit books the same machine and eligible ITC.

Common mistakes

Treating the move as non-taxable because both GSTINs share one PAN.
Using depreciation value without a valuation memo.
Capitalising the asset in the new unit before matching invoice and serial number.
Assuming e-way-bill treatment is automatically satisfied by an internal asset note.

Frequently asked questions

Why is an internal transfer a supply?

GST treats separately registered establishments as distinct persons for Schedule I supplies.

Can invoice value be accepted where full ITC is available?

Rule 28 contains a deeming mechanism for such cases; document eligibility and facts.

Does book value determine GST value?

Not by itself.

What should the recipient preserve?

Invoice, movement proof, e-way-bill where applicable, asset receipt note and ITC record.

Official sources

Central Board of Indirect Taxes and Customs - Central Goods and Services Tax Act, 2017 (current statutory text)
CBIC - CGST Valuation Rules (current rules)

Disclaimer: Educational and informational content only. Apply the current law, instrument, contract and facts before acting; obtain professional advice for material or disputed matters.

Disclaimer

Educational and professional reference only; confirm the current law, rates and the facts of your case before relying on this page.