Place of supply

[Archna Gupta]

I have one query regarding place of supply. The situation is if a person supplying some art work, decorative items, paintings etc. to Indian embassy in China but the order is given by ministry of external affairs and he will raise invoice to Ministry of external affairs in India.

Will it be treated as export? Do bill to ship to model works for supplying goods out of India?

[Rajagopalan Ranganathan]

Madam,

You are supplying the goods to Ministry of External Affairs. Therefore both supplier and recipient are located in India though the goods supplied is meant for Indian Embassy in China. Therefore you have to pay IGST on the transaction value since it will be treated as inter-state supply. If you ship the goods directly to China it will be treated as export of goods. This you can do under bond/LUT without payment of IGST or on payment of IGST and then claim refund of the same.

However, since the invoice is raised on Ministry of of External Affairs the department will treat it as inter-state supply provided you are located outside New Delhi.

[Alkesh Jani]

Madam,

In this regards, my point of view is that, if the person is located outside delhi, i.e. where Ministry of External affairs is situated, then IGST will be applicable and If the person is located in Delhi than CGST+SGST is applicable.

Ship to model is not applicable in this case, as order is not from the Embassy in Chaina. Here, Ministry is required to take registration under GST and has to engage CHA for export to embassy.

Our experts may like to correct me if mistaken.

Thanks

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Rajagopalan sir

[Nash Industries I Pvt Ltd]

If the supplier is in Delhi, any supply to Ministry of External Affairs is a local supply. That is point of supply - Intra State. (CGST + Delhi GST).

If the supplier is other than Delhi, then the point of Supply is Inter State and IGST is payable.

it is not an export in such case.

If the goods are shipped directly to the Indian Embassy in China, it is an export. Its advisable to ship to Ministry rather than to Indian Embassy in China. However, the refund of GST / Admission of Proof of Export by Customs/ GST in the absence of receipt of payment in FC from China will be difficult though eligible.

Different views possible.

Regards

S.Ramaswamy

[Ganeshan Kalyani]

Bill to ship to model may not work here . Export procedure is involved here.

AI Summary

Place of supply determines GST: invoicing to domestic ministry makes supply inter state or intra state, export only if shipped abroad.
If invoice is raised on the Ministry of External Affairs in India, the GST treatment depends on supplier and MEA locations: supplies between different States/UTs are inter state attracting IGST, while supplies within the same State/UT are intra state attracting CGST plus SGST. Only where goods are shipped directly to the Indian Embassy abroad will the transaction be treated as an export subject to export procedures, bond/LUT conditions, or GST refund mechanisms; the bill to/ship to model does not convert an MEA invoiced supply into an export.