Bill to ship to where bill to party is outside India

[Veenaa Venkatesh]

In case a supplier in India ships goods to a person in India on the direction of his customer located outside India, what are the GST implications in terms of nature of supply and person liable to pay ?

[KASTURI SETHI]

Goods must be taken out of India otherwise it is not export of goods.

[KASTURI SETHI]

For detailed reply,  please elaborate your query with full facts.

[Sadanand Bulbule]

Dear querist

It is as good as domestic supply of goods either inter-state or intra-state depending upon the origin and destination of goods. Accordingly you have to charge applicable tax. In no way, such transaction can be termed as export.

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

Have no qualms about this supply.  This supply is either inter-state or intra-state and will suffer GST.  Period. 

To digress, you have a larger problem at hand.  The moneys have realised in foreign currency - meaning thereby - an IRM has been created at the EDPMS portal of RBI.  You will not be able to square this with a shipping bill as the supply is domestic.  Kindly talk to your bankers on this also.  Thanks

[Veenaa Venkatesh]

Yes sir. Agreed that it is not an export. My doubt was which clause of Section 10 of the IGST Act has to be seen to determine the place of supply? Also, is the foreign customer liable to take registration ?

[KASTURI SETHI]

Q. Is the foreign customer liable to take registration ?

A.  The jurisdiction of GST Acts is extended to the whole of India and not outside India.

Why do you think so that the buyer located in a foreign country should take GST registration ?   

[Shilpi Jain]

Section 10(1)(a) would be applicable

The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,––

(a) where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;

[Veenaa Venkatesh]

Sir, for the supply of goods by foreign party to ultimate customer in India is GST payable since supply is happening in taxable territory? If so, who is liable to pay?

Also, Ma'am the reason we are looking at 10(1)(a) and not 10(1)(b) is because the bill to party is unregistered? Will insertion of 10(1)(ca) have an impact?

AI Summary

Place of supply rules determine GST liability; shipments directed by foreign buyers but delivered in India are domestic supplies. Goods shipped within India on the direction of a buyer located abroad are not exports if the goods do not leave India and must be treated as domestic supplies-inter-state or intra-state-based on the place of supply rule that identifies the location where movement of goods terminates for delivery; the foreign instructing buyer is not required to register under GST by virtue of being abroad, and foreign currency realisation may raise EDPMS/FEMA reconciliation issues.