Bill to ship to transaction

[Venukumar HJ]

Dear All,

Company 'A' registered in 'India' entered into contract with Company 'B' located in 'France' for manufacture and supply of Goods. 'B' Company instructed 'A' to supply goods to 'SEZ unit Nagpur' in India. Company 'A' subcontracted the contract to 'C'. 'C' will deliver the goods to 'A'. Later contract terms changed to 'A' has to deliver goods 'SEZ unit in AP' to 'D'. Then Goods will be assembled in SEZ AP. Responsibility of A ends once goods are delivered to 'SEZ Unit AP' to 'D'. But 'A' will raise invoice to the 'B' on whole contract. After assembling in SEZ AP. Goods are supplied and installed in SEZ Nagpur. D is the agent of Customer B. 'A's' risk will end only once goods are installed in SEZ Nagpur.

Query.

1. Is Supply can be treated as ' Zero rated supply' or ' Interstate Supply'?

2. How Invoice to be raised?

[YAGAY andSUN]

Please make your query bit easy for us to understand and enabling us to revert.

[Ganeshan Kalyani]

In my view it is not a zero rated supply.

[CASusheel Gupta]

Dear Venukumar HJ

In my opinion, the transaction seems to be Inter state.

A shall raise bill to B of France.

A shall not raise bill to SEZ unit

It is not export since goods are not moving out of India.

This transaction gets covered under section 7(5)(c)

Opinion of experts also required.

Thanks and Regards

CA Susheel Gupta

8510081001, 9811004443

AI Summary

Indian Company Debates Zero-Rated vs. Interstate Supply for SEZ Goods Under Contract with French Firm A company in India, 'A,' contracted with a French company, 'B,' to manufacture and supply goods. 'B' instructed 'A' to supply goods to a Special Economic Zone (SEZ) unit in Nagpur, India. 'A' subcontracted to 'C' for delivery, but later, the goods were redirected to an SEZ unit in Andhra Pradesh for assembly before being installed in SEZ Nagpur. 'A' invoices 'B' for the entire contract. The discussion revolves around whether this transaction is a 'zero-rated supply' or 'interstate supply,' with opinions suggesting it is interstate as the goods do not leave India.