Heeralal & Sons, a prominent supplier operating in Maharashtra, has established three distinct branches located in Mumbai, Pune, and…

Section 25 (4) of the CGST Act, 2017, states that a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory, shall, in respect of each such registration, be treated as distinct persons. So, Mumbai branch and the Pune branch will be treated as "distinct persons" for GST purposes. Further, clause 2 of Schedule I to the CGST Act, 2017, specifies that "supply of goods or services or both between distinct persons as specified in section 25, when made in the course or furtherance of business," shall be treated as supply even if made without consideration. Accordingly, the transfer of garments from the Mumbai branch to the Pune branch will be treated as a supply between distinct persons under the CGST Act, 2017. Therefore, Mumbai branch must issue a tax invoice and pay GST on such a transfer, irrespective of whether any consideration is charged for this internal transfer.