IGST charging

[DK AGGARWAL]

Sir

i am registered under GST in Delhi and getting supplies of goods from Mumbai from registered supplier in Mumbai Sir my supplier wants to mention rate of good ex work in Mumbai and charge cgst and SGST on the plea that by mentioning ex works rate it shows that goods are delivered in Mumbai

Please clarity is he right or should charge IGST

D K Aggarwal

[KASTURI SETHI]

There is no substance in the opinion of your supplier. The seller/supplier of the goods wants to say he has supplied the goods at the gate of factory or show room. It is totally wrong. The manufacturer or dealer cannot avoid IGST by writing the words, "ex-works price, ex-factory or ex-showroom price". These words mean responsibility of seller ceases as the goods are handed over to the buyer in Mumbai itself. Thereafter, seller is not responsible for transportation charges, insurance and safe delivery up to the destination i.e Delhi. The seller/supplier is legally bound to write complete name & address of consignee/buyer along with other particulars. By writing the words, "Ex-" the supplier can save freight, insurance and transportation charges etc. but cannot save IGST inasmuch as ultimate destination is Delhi and inter-State supply takes place.

How can supplier avoid writing complete address of the buyer ? Can he deliver the goods to a casual buyer ? It is farcical situation and if acted upon will prove Himalayan blunder.

AI Summary

Inter-State supply IGST liability: supplier cannot escape IGST by invoicing as 'ex-works'; destination controls tax. Labeling a sale as ex-works, ex-factory or ex-showroom does not avoid IGST; these terms only allocate transport and insurance responsibility. If the ultimate destination is in another State, the transaction is an inter-State supply attracting IGST. The supplier must record the complete name and address of the consignee and required particulars; omitting consignee details or treating delivery as to a casual buyer does not change the tax character determined by destination.