TREATMENT OF GOODS SENT FOR TRIALS

[ANITA BHADRA]

Dear Sir/ Madam

Public Sector Undertaking of Gaziabad ( Under Ministry of Defence) send Radar to other state for trials on returnable gate pass .

This Radar is developed by PSU and will remain property of PSU only .

My query is- under GST Act , how long this property can be with other state and what is the GST implication on it .

Regards & Thanks in Advance

CA Anita Bhadra

[Alkesh Jani]

Sir/Madam,

In this regards, my point of view is that, firstly, it is to be ascertain that the said PSU has entered any contract with other state for which consideration is required to be made by other state, if so, as there is no transfer of title of goods, it may be covered under the ambit of supply of service under HSN Code 99731. However, the consideration may be as agreed upon. In the above case, the said radar can be with other state till contracts permit.

Further, if there is no consideration, and as the other state is not using the said radar, for any furtherance of business, it may be out of scope of GST. In this case, also the other state can keep the radar, till agreed upon. However, the PSU may be required to show other state as his additional place of business, as trials are taking place at other state.

Moreover, E-way bill is to be issued irrespective of whether the movement of goods is caused by reasons of supply or otherwise. In respect of transportation for reasons other than supply, movement could be in view of export/import, job-work, SKD or CKD, recipient not known, line sales, sales returns, exhibition or fairs, for own use, sale on approval basis etc.

I request our experts to offer their comments and correct me if mistaken.

[KASTURI SETHI]

Trial/testing falls under HSN (SAC) 998346. Who would conduct trials ? What is legal status ?

[KASTURI SETHI]

The activity of testing/trial of radar cannot fall under HSN 99731 at all. However, remaining points raised by Sh.Alkesh Jani Ji, are worth consideration to arrive at final decision. The remote possibility of RCM in this case cannot be ruled out. Still full facts are known to.

[YAGAY and SUN]

Dear CA Anita Bhadra

Such queries must not be raised/replied on an open forums like TMI as these are very sensitive matter related to Nation's Security. We hope you understand it.

Requesting TMI to delete this query along with all replies. Requesting all experts to not to revert on such queries.

Regards,

YAGAY & SUN

[Ganeshan Kalyani]

Agreed.

[KASTURI SETHI]

Madam, Enemies (various types of criminals) of our country have not respect for any law. Such persons do not read taxations site. Only law abiding citizens and professional (who help law abiding citizens to abide by taxation laws) browse TMI and taxation law sites. Criminals have nothing to do with TMI. TMI helps only those who want to comply with taxation laws of our country.

[YAGAY and SUN]

Well, we must know about the word "Snooping" which is being conducted by other countries against our Mother Land.

Irony is that even does not know about it and Government Department/Employees including Customs , Income Tax Department, Excise Department using gmail for communication with the assessee/dealer and as per Hon'ble Supreme Court's guidelines Government Employees can't use gmail, yahoo mail etc for official work as USA/CHINA/Pakistan like countries do snooping in such e-mails to dig out the information which do harm to our country.

Even last week I was attending P/H before Asstt. Commissioner and this matter was raised that no information would be shared if your department sends e-mail by using gmail and showed him the Guidelines of Hon'ble Supreme Court. After going through it we got mail from .gov.in

We should not do anything directly or indirectly knowingly or unknowingly, Consciouslyor Unconsciously which could do harm to our Mother Land.

Just read about Isreal and Israelis and about their passion, love and sacrifices toward their country. We are 1.35 bn and just says what our country is doing for us.

Think again.

Long LiveBharat.

Jai Hind.

[KASTURI SETHI]

Thanks to M/s.YAGAY and SUN for posting such very useful information.

[KASTURI SETHI]

Sometimes the addition of a little information can bring a new perspective to a problem or help you to better understand a person or situation.

Your spirit of patriotism is appreciable indeed.

[Ganeshan Kalyani]

Totally agreeing with M/s.Yagay and Sun.

[Ganeshan Kalyani]

How does a people post their product here as an advertisement. We experts tell them not to do such advertisement without the knowledge of TMI. Similarly people may try to extract information from any source.

[ANITA BHADRA]

Thank you so much Alkesh ji for constructive reply.

YAGAY AND SUN JI -

I appreciate your patriotism and concern for country .

Please try to understand ,it’s a simple GST related query posted by one of the professional in close nit group .

Defence PSU developing Radars and sending for trials is not at all secret Act . Its absolute general query of GST implications . No where its mentioned about secret codes etc .

Still if admin & other experts feel is inappropriate , I render my apology . Kindly delete the query .

Regards

CA Anita Bhadra

[YAGAY and SUN]

Thanks to all for their understanding on this sensitive matter. In our view, whenever we do any task, job or make any decision in our life for our fulfilling of wants (but not needs), then we should see it on the basis of following aspects,

1. Whether it is environmental friendly?
2. Whether it is in the interest of my Country & my Earth?

Now coming back to your query, in our view since it is capital goods then limitation period is 3 years i.e. within 3 years it must come back. Further, it must go on delivery challan but not on returnable gate pass as RGP is not a document prescribed under the GST Laws.

[Alkesh Jani]

Dear all,

First of all, I would like to thank all for the views expressed, as well as, their concerns with the security of our mother land. This really touched my heart, the spirit of patriotism is appreciable, but the suggestion that this discussion may be removed or deleted is not acceptable, because, let whole world know that the each participant of this TMI forum, is not only concerns with the tax related matters but believes in COUNTRY FIRST. The TMI, who has provided this platform, where the tax payers or any one raising any query, the experts, naming any will be injustice to others, gives their most valuable advice, and even a bit is left, is filled by others, that too at free of cost, this is also the SERVICE TO THE NATION. In this time when there is lot of ambiguty, few so called experts taking undue advantages of tax payers, the TMI and the experts are extending their services also deserves salute, in my view.

Secondly, with the query raised, I just wish to bring to your notice that, in the query, the name of PSU is not declared and details of radar is also not mentioned, as during the studies of communication radar is one of the topic, however, it is also used in navigation, so I thinks, in no way it may harm our national security, then too, to be aware is the best and in this regards, the CA Anita ji has already extended her apology. However, we all are aware and will be in future also.

Once again I thank all the experts and TMI for providing such a great platform.

My Regards,

[KASTURI SETHI]

Sh.Alkesh Jani Ji,. You are 100% right. I agree with you.C.A.Anita Bhadra has not committed any mistake. She took utmost care while drafting query.

[YAGAY and SUN]

Thanks TMI for deleting the name of the place and putting the phrase Other State in the query raised.

Thanks to All.

AI Summary

Supply classification for trial consignments may be service or out of scope; e way bill and delivery challan obligations follow.
Where capital goods are sent interstate for trials without transfer of title, the shipment may constitute a supply of service if consideration is payable, or be out of GST scope if no consideration and no business use by the recipient. Compliance duties remain: an e way bill is required for movement, a delivery challan should be used (returnable gate pass is not a GST document), and the sender may need to record the trial site as an additional place of business; classification and reverse charge exposure depend on full contractual facts.