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

XYZ's Billing to UK, Shipping Within India: GST Applies, No BCD; Export Benefits for Direct UK Exports Explained. XYZ, an Export Oriented Unit (EOU), plans to bill PQR in the UK for API raw materials while shipping them to ABC in India, receiving payment in foreign currency. XYZ queries whether Basic Customs Duty (BCD) and GST should be charged, given the billing is to the UK but shipping is within India. The response clarifies that GST applies since the goods do not physically leave India, thus not qualifying as exports. However, for formulations directly exported to PQR, XYZ can avail export benefits like GST refunds and Merchandise Exports from India Scheme (MEIS) scrips.