export of goods

[SHARAD ANADA]

1) Mr. A of India Export Goods of USD 10,000/- Without payment of tax to Mr. X of Africa.

2) When Goods reached Africa Mr. X refused to take delivery of the goods.

3) Mr. A of India Issued Credit Note to Mr. X of Africa with condition that Mr. X will born all the cost of freight, port charges at Africa etc. for USD 3000. For this $3000 Mr. A of India will raise Invoice on Mr.s X of Africa.

4)Now Mr. A of India Contacted Mr. P in Africa for selling his goods at Africa port. Mr.

5) P agrees to purchase goods at condition that all the expenses including custom duty of Africa will be born by Mr. A of India.

What will be GST implication in such transaction.

[KASTURI SETHI]

Dear Sh. Sharad Anada Ji,

1. The goods in question stand exported. It has no relevance whether exported to consignee X or Y. It is zero rated supply. It cannot be denied.

2. The amount of USD 3000 retained by A is in relation to goods exported. Hence it qualifies zero rated supply.

3. The payment made to an other consignee called P on account of Customs duty of Africa does not conform to the parameters of "consideration" and "supply".

Hence GST is not payable/applicable.

AI Summary

Zero-rated supply remains applicable to exports despite consignee change; reimbursement payments do not constitute consideration. Export of goods qualifies as a zero-rated supply even if the originally named consignee refuses delivery and goods are sold to another purchaser at the port. Amounts retained by the exporter linked to the exported goods, including adjustments effected by credit note, retain the zero-rated character. Payments by the exporter to settle foreign customs or port charges on behalf of the goods do not amount to consideration for a taxable supply and are not subject to GST.