IGST applicable on supply of goods outside India from Outside India till 31 January 2019
The Appellant, engaged in the business of supply of pumps, had received a purchase order from Bangladesh. Upon receipt of such purchase order, the parent Company of the Appellant, situated in Poland directly shipped the goods to the customer is Bangladesh. In view of the above, the Appellant had sought an advance ruling before the Gujarat AAR.
The Appellant, engaged in the business of supply of pumps, had received a purchase order from Bangladesh. Upon receipt of such purchase order, the parent Company of the Appellant, situated in Poland directly shipped the goods to the customer is Bangladesh. In view of the above, the Appellant had sought an advance ruling before the Gujarat AAR to ascertain whether the Appellant is liable to pay IGST on out and out transactions taking place beyond the Customs frontiers of India. The AAR had held that IGST will be leviable on such transactions prior to 01 February 2019. Aggrieved, the Appellant preferred an Appeal before the Gujarat AAAR.
The Gujarat AAAR observed that Entry 7 of the Schedule III covers supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India. The AAR further observed that the supply of goods in the instant case takes place from Poland, which is a non-taxable territory, to Bangladesh, which also is non-taxable territory, without the said goods entering into India, the transactions are covered by said Entry 7 of Schedule – III. In view of the above, the AAAR held that no GST is leviable on such type of transactions which have taken place with e ect from 01 February 2019 and onwards.
SPX Flow Technology India Private Limited Order No: 02/11/2021
Authors’ Note:
The CGST Act extends to the whole of India only and not beyond it. Therefore, any transaction which takes place beyond the territories if India cannot be made exigible to GST. Accordingly, irrespective of the date of insertion of Entry No. 7 in Schedule III of the CGST Act, GST cannot be levied on such transactions which are beyond its jurisdiction. This view has been upheld by Maharashtra AAR in RE: INA Bearing India Private Limited [2018-TIOL-286-AAR-GST]
Disclaimer:
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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