Levy of GST

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my clients who are going to get the orders from abroad and the same would be supplied directly to a client who is also in abroad. The goods will not reach Indian territory.

As per my understanding when the goods are not reach to India and transacted within the Non-Taxable Territory, then the tax would not be attracted(Schedule-III Sesrial No.7) of CGST Act,2017.

However, in the latest advance ruling issued by the State of Ahmedabad to M/s. Sterlite Technologies Ltd., dated 17.03.2020 = 2020 (6) TMI 485 - AUTHORITY FOR ADVANCE RULING, GUJARAT states that, the tax would be levied since the goods has not been exported physically, so, its covered as supply u/s 7 of CGST Act.

Now, whether we need to charge tax on supply would be made out side India or not.

Kindly elaborate. Thanks in Advance.

AI Summary

GST on supplies outside taxable territory may not apply where goods never enter India, but AARs vary in approach.
The document addresses whether GST applies when goods bought abroad are supplied directly to foreign buyers without entering India. It contrasts an AAR finding that no GST arises where goods are never imported with a Gujarat AAR taking a contrary view. Administrative guidance (Circular No.33/2017) and the high seas sales concept indicate IGST is collected at importation and value addition across high seas sales is included in import valuation. AAR decisions bind only the applicant and relevant officer, so taxpayers outside the ruling may still face departmental notices and must rely on factual records to contest liability.