Supply from one FTWZ to another FTWZ

[Kaustubh Karandikar]

XYZ registered with GST importing goods and storing at PQR (FTWZ – 1) without paying import duty. From FTWZ – 1, goods are ‘Billed To’ by XYZ to ABC (Non – FTWZ) registered with GST, but on instructions of ABC, shipped at DEF(FTWZ – 2). XYZ issues ‘Commercial Invoice’ on ABC. Whether XYZ is required to reverse proportionate input tax credit on common services since no GST is paid on this transaction?

AI Summary

Input tax credit reversal: do FTWZ-to-FTWZ movements without GST payment require proportionate ITC reversal treatment? Whether a supply billed by an importer in FTWZ 1 to a non FTWZ GST registrant but shipped to FTWZ 2 triggers an obligation to reverse proportionate input tax credit on common services is the issue. Facts: goods imported and stored in FTWZ 1 without import duty, commercial invoice issued to the non FTWZ buyer, and shipment effected to FTWZ 2 on consignee's instruction with no GST charged. Determination depends on GST characterisation of the movement, invoicing and place of supply treatment, and resulting GST liability.