Purchase from Country A and supply it to Country B without bringing it to India

[TN Rajendran]

Dear Experts,

I'm buying a material from one country, say Germany. I want to sell it to my customer in another country, say Dubai.

Normally, customs should be paid if I import it to India from Germany and then export it to Dubai from India. Since the customs duty that I'm paying during the import getting added to my cost I'm not able to supply it to at a competitive price to my customer is Dubai.

Suppose, if I directly supply the materials from Germany to Dubai (i.e., without bringing it to India) can I avoid Customs duty? What would be its Pros and Cons?

Thank You.

AI Summary

Clarification on customs duty: No duty for goods sold from Germany to Dubai without entering India per CGST Act. An individual inquires about the customs implications of purchasing materials from Germany and selling them directly to Dubai without importing them into India. Two experts respond. The first expert clarifies that under the CGST Act, transactions where goods do not enter India are not considered a supply of goods or services, and thus, customs duty is not applicable. The second expert concurs, stating that since the goods do not enter Indian territory, customs duty is not imposed, but advises routing documents through an authorized dealer or banker.