Manufacturer's direct exports with third party exporter mentioned doesn't qualify for AAR ruling under Section 97

AAR Maharashtra held that the application seeking ruling on whether goods exported directly by manufacturer with applicant mentioned as Third Party Exporter under Foreign Trade Policy constitutes zero-rated supply was not maintainable. The Authority determined that the question regarding whether the transaction constituted exports by the applicant or the manufacturer exporter fell outside the purview of Section 97 of CGST Act, 2017, and therefore declined to provide any opinion on the matter.

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Issues Involved:
1. Whether the goods exported out of India directly by the manufacturer mentioning the applicant as Third Party Exporter for the purpose of Foreign Trade Policy will be considered as exports at the hands of the Applicant under the GST lawsRs.
2. If the said transaction is held to be exports at the hands of the applicant under GST, will it qualify as zero-rated supplyRs.

Issue-Wise Detailed Analysis:

1. Whether the goods exported out of India directly by the manufacturer mentioning the applicant as Third Party Exporter for the purpose of Foreign Trade Policy will be considered as exports at the hands of the Applicant under the GST lawsRs.

The applicant, a company dealing in chemical products, procures chemicals from manufacturers for export to a foreign client, Ampak. The applicant received an export order from Ampak and placed a back-to-back purchase order on Sai Fertilizers, who manufactured and exported the goods directly. The Shipping Bill and Bill of Lading mentioned the applicant as the Third Party Exporter. The applicant received payment in foreign currency and claimed the transaction as exports under GST while filing GST Returns. The applicant argued that the supply made to Ampak amounts to export under GST laws, citing Section 2(5) of the IGST Act, 2017, which defines "export of goods" as taking goods out of India to a place outside India. The applicant contended that the movement of goods from India to the USA qualifies as export supply under GST laws, and the applicant should be considered the exporter since they received the export order and payment in foreign currency.

The concerned officer acknowledged that the goods were exported by the manufacturer directly from their premises, and the export invoice, shipping bill, and bill of lading mentioned the manufacturer as the exporter and the applicant as the third party exporter. The officer also noted that while this may be consistent with the Foreign Trade Policy (FTP) 2015-20, it does not appear to be legal under the GST Acts, 2017. The officer raised concerns about how the third party exporter can claim ITC when no invoice is raised in their name and there is no supply to the third party exporter as far as the export consignment is concerned.

The Authority for Advance Ruling (AAR) observed that the main question is whether the transaction can be considered as exports made by the applicant or the manufacturer exporter Sai Fertilizers. Upon detailed examination, the AAR concluded that this question is not covered under the purview of Section 97 of the CGST Act, 2017. Hence, the application was deemed not maintainable, and no opinion was provided.

2. If the said transaction is held to be exports at the hands of the applicant under GST, will it qualify as zero-rated supplyRs.

Given that the first question was not answered as it was beyond the purview of Section 97 of the CGST Act, 2017, the second question was also not answered.

Order:

For reasons discussed, the questions were answered thus:
- Question 1: Not answered since the question is not covered under the purview of Section 97 of the CGST Act, 2017.
- Question 2: Not answered in view of the answer to Question 1.

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