Inter-branch accounting

Branch accounts

Head office (HO) keeps a Branch A/c for each branch; each branch keeps an HO A/c. At year end they must show equal and opposite balances.

Goods sent to a branch

In HO books:   Branch A/c           Dr
                   To Goods Sent to Branch A/c
In branch:     Goods Received from HO A/c   Dr
                   To HO A/c

GST on branch transfers

• Same state, same GSTIN: a stock transfer is not a supply. Use a delivery challan; no GST.
• Different states (different GSTINs): branches are distinct persons. A transfer is a taxable supply even without payment. Issue a tax invoice with IGST at open-market value (or 90% of the price to unrelated customers for goods for resale, or cost + 10% where applicable). The receiving branch claims ITC.
• An e-way bill is needed if the value is above the limit, even for same-GSTIN transfers.

Reconciliation

Match HO and branch balances regularly. Differences usually come from goods or cash in transit.