Bill of Supply

[Kaustubh Karandikar]

XYZ is supplying goods by making 1) High Sea Sale 2) Importing, Storing in Customs bonded warehouse without paying import duty. These goods are cleared from customs bonded warehouse by the customer of XYZ by paying import duty. XYZ is simply giving Commercial Invoice without GST. In both the situation since GST is not paid by XYZ, whether XYZ is required to prepare ‘Bill of Supply’ or only ‘Commercial Invoice’ is sufficient?

[Rajagopalan Ranganathan]

Sir,

According to Section 31 (3) (c) of CGST Act, 2017 a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 (Composition Dealers) shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed:

XYZ is not supplying exempted goods or services or both or paying tax under the provisions of section 10 (Composition Dealers). He is supplying imported goods but customs duty and IGST thereon is paid by a third party who is clearing goods from the customs bonded warehouse. In this case, XYZ would issue an authorization authorizing the third party to clear the imported goods from customs bonded warehouse on payment of applicable duty/taxes. Hence XYZ need not issue either bill of supply or commercial invoice.

[KASTURI SETHI]

I am also of the same view as opined Sh.Ranganathan, Sir.

[Shilpi Jain]

Sale of warehoused goods before clearance for home consumption and high sea sales are Sch III items under GST. Hence, no supply.

No bill of supply to be issued. Commercial invoice (non GST document) would suffice.

[Karan Bansal]

I agree with Ranganathan sir.

[Ganeshan Kalyani]

A commerical invoice would suffice.

AI Summary

High sea sale treated as non supply, so commercial invoice suffices and no bill of supply is required.
High sea sales and sale of warehoused goods before clearance are treated as Schedule III non supply when a third party clears the imported goods by paying customs duties and taxes. In that situation the supplier who does not pay GST need not issue a tax invoice or bill of supply; a commercial invoice or authorization for the third party clearance suffices to document the transaction.