Supplies between separate GST registrations of the same business need their own GST review. Section 25 treats specified separately registered establishments as distinct persons, and Schedule I can cover supplies between such persons in the course or furtherance of business even without consideration. Rule 28 provides valuation rules for covered supplies. Organise the file around the supplying GSTIN, receiving GSTIN, actual supply and approved valuation basis rather than the absence of an external sale.
Map registrations and operational roles
Create a registration map showing GSTIN, State or territory, principal activities, stock locations and relevant establishments. Distinguish a movement within one registration from a supply involving separate registrations. A warehouse code in the inventory system is not necessarily a separate GST person.
Link stock-transfer instructions and service arrangements to the correct registrations. If a head office requests shipment from one branch directly to another location, record which supply each document represents. Avoid using the company's common legal name as the only party identifier; identical names can conceal different GSTINs and tax treatment.
Document goods actually transferred
Retain item codes, quantities, units, dispatch evidence, receiving acknowledgment and the purpose of transfer. Record returns, shortages and damage separately. A stock ledger quantity movement and a GST value decision answer different questions, so both should be available.
For machinery or capital goods, also identify the asset, previous use and relevant credit history for any additional review. Do not apply the routine finished-goods transfer setup automatically. Supplies without consideration still need the valuation and reporting analysis applicable to their facts; “internal transfer” is a commercial description, not a universal exemption.
Apply and record the valuation method
Rule 28's ordinary framework addresses open-market value, like-kind-and-quality evidence and prescribed fallback methods. It also contains relevant provisos, including the full-ITC deeming provision and an option for specified goods intended for further supply as such. Record which method is selected and why its conditions are met.
Maintain source prices and dates rather than copying a standard percentage into every branch transfer. If the recipient is eligible for full ITC, preserve the basis for that conclusion. If it has exempt activities or restricted credits, investigate whether the condition actually holds for the supply instead of assuming that registration alone establishes eligibility.
Illustrative branch transfer
Suppose a Maharashtra registration sends two hundred units to its Karnataka registration for onward sale. The approved invoice value under the applicable Rule 28 review is ₹600 per unit, giving ₹1,20,000 taxable value. Assume a confirmed 18% aggregate rate and an ordinary inter-State supply with place of supply in Karnataka. IGST is ₹21,600.
Keep the valuation note, dispatch record and receiving entry linked to the ₹1,41,600 invoice. The company may eliminate internal balances in consolidated accounts, but that consolidation does not erase the GST documents of each registration. A common bank account or no cash settlement does not make the tax working unnecessary.
Separate own services from third-party input services
Head-office activities and third-party services received centrally can raise different questions. Identify whether the head office itself supplies a service to another registration or receives common input services requiring the current Input Service Distributor framework to be examined. Do not treat every central expense as an interchangeable cross-charge.
Section 20 and related ISD provisions have changed, so review the operative requirements for the period and service category. Keep vendor invoices, recipient attribution and the selected distribution or supply route. Older internal practice should not be treated as permanent permission to use either route without checking current law.
Keep allocation evidence specific
Where an allocation is relevant, document the cost pool, beneficiaries, direct attribution and allocation basis. Headcount may suit one internal activity while usage or another measure may better describe a different one. An allocation spreadsheet should state what the cost represents and why the selected registrations benefit.
For example, a ₹90,000 internal support cost pool allocated by verified usage of 40%, 35% and 25% produces ₹36,000, ₹31,500 and ₹22,500. Those amounts are a commercial working, not an automatic GST valuation conclusion. The applicable provision, recipient-credit position and nature of the activity still determine the approved treatment.
Reconcile both sides of the registration pair
Compare the supplier's invoice register with the recipient's receipt and accounting records. Check invoice number, date, value, tax heads and quantity. Investigate transfers dispatched near month-end that one branch records in a different period. Do not fix timing differences by deleting one side's evidence.
Maintain adjustments for returned stock and price changes with the original references. A receiving branch should know whether an adjustment concerns quantity, value or tax. Reconcile any applicable outward-supply data and recipient-credit records using the actual documents rather than consolidated group totals alone.
Give repeat transfers a controlled process
Prepare an approved transfer policy covering routine supplies, valuation basis, evidence and exception triggers. Review new items, changed credit eligibility, different locations and new central-service arrangements before reusing the old setup. Preserve historical versions and approvals.
The practical goal is a traceable record for each GST registration. Show what moved or was provided, why it is a supply, how value was determined and how both sides recorded it. That keeps internal business convenience compatible with the separate tax identities that GST requires.