What is Stock transfer between fulfilment centres?

Why stock moves between fulfilment centres

• Placement: a marketplace may move stock closer to where it sells, so deliveries are faster and cheaper.
• Seller requests: you may move stock to an FC that sells more of a SKU, or to prepare for a sale event.
• Consolidation or removal: stock may be pulled back from one FC before being returned to you or moved on.

Some marketplaces move stock between their FCs on their own as part of their programmes. Check your agreement and the inventory reports, because a transfer you did not start still has GST consequences.

Same state, same GSTIN

Each FC where your stock is kept is a place of business on your GST registration. A move between two places on the same GSTIN is not a supply. The goods move under a delivery challan, and an e-way bill where the value and the rules require one.

Before stock is sent to a new FC, the FC must be added to your registration as an additional place of business. Stock held at an address that is not on your registration can lead to detention of the goods and penalties.

Between states, two GSTINs

A move from an FC in one state to an FC in another is a supply between two of your registrations, which GST treats as distinct persons. It needs a tax invoice with IGST from the sending GSTIN, an e-way bill, and an e-invoice if your turnover requires it. The receiving GSTIN then claims the IGST as input tax credit. See stock transfer between GSTINs.

You can only send stock to an FC in a state where you are registered. Marketplaces generally restrict transfers to states on your registrations.

In the books

• A transfer is not revenue. The stock moves from one location to another at its carrying cost.
• Reconcile the marketplace's inventory ledger or transfer report every month: units shipped out of one FC should equal units received at the other.
• Units lost or damaged in a transfer by the marketplace are usually reimbursed under its policy, if you claim within its time limit. Input tax credit on goods lost or destroyed has to be reversed.