GST implication on pass through invoice by Indian Compnay

[Dhruva]

A foreign Company has given an order of some goods to other foreign company. But due to some issue in conducting commercial transaction. The supplier foreign company has raised invoice to its sister concern in India and the Indian company has raised invoice to the receiver foreign company with no commission or fee. what will be the GST implication?

AI Summary

Foreign-to-foreign goods sale via Indian affiliate likely outside GST scope under IGST Act Section 7, but FEMA risks remain A foreign-to-foreign goods sale routed via an Indian affiliate as a pass-through invoice is generally outside GST scope if the goods neither enter India nor the supply is deemed to occur in the taxable territory; mere invoicing by the Indian entity does not automatically attract GST, provided documentary evidence supports extraterritorial movement. However, routing receipts and payments through India raises FEMA concerns and merchanting trade rules - particularly where no commission is charged - so the arrangement should ensure compliance with forex regulations, proper documentation, and that merchanting conditions (including profit motive) are met.