Supply by EOU

[Kaustubh Karandikar]

XYZ(EOU) will be “Billing” the supply of API (Raw Material) to PQR (U.K.) and physically “Shipping” the supply to ABC(India). XYZ will receive the money in foreign currency from PQR. The formulation of the said goods viz. capsules will be directly exported to PQR by XYZ. 1) Is XYZ require to charge BCD + GST for such supply since ‘Bill To” is U.K. but ‘Ship To’ is India? 2) For the formulation directly exported, will there be any export benefit available to XYZ?

[Venkataprasad Pasupuleti]

GST is liable on the supply of API as it does not construe the 'export of goods' in the absence of physical movement outside India.

For the formulation, it can be treated as export and all benefits like GST refund & MEIS scrips can be availed.

AI Summary

Export of goods: physical movement outside India determines export status; domestic shipment is taxable while direct exports can claim benefits. Whether a supply constitutes an export depends on physical movement outside India; billing to a foreign buyer alone does not make a domestically shipped API an export, so GST applies. Formulations physically exported qualify as exports and may claim GST refund and export incentives like MEIS, subject to compliance and proof.