GST and FEMA Triparty transaction

[ROHAN THAKKAR]

Company "C" Indian Company get order for the manufacture of machines from Company "B" resident in Germeany, then company "C" need to supply the machine to Company "A" which is also resident Indian compnay. Now "C" will get money from "B" and "B" will get money from "A". the mchines remians in India only from C to A. please explain how the billing will be made from the prospective of GST, FEMA.

 

AI Summary

Domestic taxable supply and third-party remittance apply when machinery stays in India despite foreign payment routing.
Supply of machinery by one Indian company to another Indian company, with payment made by a German company and goods remaining in India, is a domestic taxable supply under GST and not an export or zero-rated supply. Consideration may come from a third party, but the supplier must issue a tax invoice and pay applicable GST. Under FEMA, third-party remittance may be permitted if supported by bona fide contractual documentation, KYC, invoicing, and satisfaction of the Authorised Dealer bank.