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

Supplier's 'Ex-Works' Labeling Misused to Avoid IGST; Must Charge IGST for Inter-State Supply to Delhi A registered GST participant in Delhi queried about a supplier in Mumbai charging CGST and SGST by labeling goods as 'ex-works' in Mumbai, suggesting delivery is completed there. The respondent clarified that this practice is incorrect. The supplier cannot bypass IGST by using terms like 'ex-works' to imply the transaction is local. Since the goods' final destination is Delhi, it constitutes an inter-state supply, necessitating IGST. The supplier must provide the buyer's full address and cannot deliver to a casual buyer, as this approach would be erroneous and legally unsound.