GST and Place of Supply

[Kaustubh Karandikar]

XYZ (Mumbai, India) had received an order from PQR(USA) towards supply of goods. The purchase order will be issued by PQR(USA) and payment will be received by XYZ(India) from PQR(USA) in foreign currency. However, as per the instructions of PQR(USA), the goods are to be physically delivered by XYZ to a third-party contract manufacturer based in Pune. 1) Whether XYZ is required to pay GST on this transaction since the buyer is outside India? 2) if yes, whether IGST or CGST + SGST?

AI Summary

GST Debate: Intra-State vs. Inter-State Taxation on Domestic Goods for Foreign Buyer Under Indian Tax Laws XYZ in Mumbai received an order from PQR in the USA to supply goods, with payment in foreign currency. However, the goods are to be delivered to a third-party manufacturer in Pune, India. The main query is whether GST applies, and if so, whether IGST or CGST and SGST should be charged. Kasturi Sethi and Shilpi Jain argue that since the goods do not leave India, the transaction is intra-state, requiring CGST and SGST. Kaustubh Karandikar contends that since the buyer is outside India, it should be treated as inter-state, requiring IGST. The discussion references a ruling by the Authority for Advance Rulings in Karnataka.