Supply of stores to foreign going vessels is not export unless earmarked for a destination outside India, with GST taxability remaining.

Supply of stores to foreign going vessels is not treated as export or zero-rated supply under the GST framework merely because the vessel is foreign going. The ruling distinguishes goods taken to a place outside India from goods placed on board while the vessel remains in India, and holds that the Customs Act warehousing exemption does not by itself convert such supplies into exports. Unless the stores are specifically earmarked for a destination outside India, the supply is not a supply to a place outside India and remains taxable under the GST or IGST regime, as applicable.

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Issues: Whether supply of stores to foreign going vessels constitutes export or zero-rated supply under the GST regime, and whether such supplies are liable to tax.

Analysis: The ruling examined the meaning of export under the Integrated Goods and Services Tax Act, 2017 and the Customs Act, 1962. It distinguished between goods taken to a place outside India and goods merely taken on board a foreign going vessel while the vessel remains in India. The exemption framework for warehoused goods under the Customs Act, 1962 was found not to convert every such supply into export. Unless the stores are specifically earmarked for a location outside India, their supply to a foreign going vessel does not amount to a supply to a place outside India and does not qualify as a zero-rated supply.

Conclusion: Supply of stores to foreign going vessels is not export or zero-rated supply unless specifically marked for a location outside India, and tax is payable under the GST Act or the IGST Act, as applicable.

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