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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the outward supplies of warehoused goods from a bonded warehouse to ocean-going merchant vessels on foreign run, Indian Navy ships and Indian Coast Guard ships, before clearance for home consumption, constitute export of goods and zero-rated supply under the IGST Act, or whether such transactions fall within Schedule III to the CGST Act and are outside the scope of supply.
Analysis: Export of goods under Section 2(5) of the Integrated Goods and Services Tax Act, 2017 requires taking goods out of India to a place outside India. The territorial definition of India under Section 2(56) of the Central Goods and Services Tax Act, 2017, read with Section 11(b) of the Integrated Goods and Services Tax Act, 2017, shows that a supply completed within India does not satisfy the destination-based requirement of export. The customs provisions relied upon by the applicant grant exemption from import duty for warehoused goods or ship stores, but they do not alter the GST definition of export. The goods remained warehoused goods and were supplied before clearance for home consumption, bringing the transactions within paragraph 8(a) of Schedule III to the Central Goods and Services Tax Act, 2017 read with Section 7(2)(a) thereof.
Conclusion: The supplies do not qualify as export of goods or zero-rated supply and are treated as neither a supply of goods nor a supply of services for GST purposes.
Ratio Decidendi: Supply of warehoused goods before clearance for home consumption is excluded from the scope of supply under Section 7(2)(a) read with Schedule III, and a transaction completed within India cannot be treated as export of goods under Section 2(5) of the Integrated Goods and Services Tax Act, 2017.
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