import demonstration equipment and instruments to customer for one year after one year return the samegst applicibility

[Seema Dwivedi]

import demonstration equipment and instruments to customer for one year after one year return the same - gst applicibility

[Ryan Vaz]

Key Considerations:

1. Supply under GST: If the demonstration equipment is provided to the customer for a fee or consideration during the one-year period, it constitutes a taxable supply under Section 7 of the CGST Act. If it's a free demonstration/loan without any charge, it may not be a supply.

2. IGST on Import: At the time of import, you must pay Integrated GST (IGST) along with customs duties. The equipment is treated as imported goods until re-exported.

3. Re-export and Refund: When the equipment is returned after one year, you can claim a refund of IGST paid on import under Section 54 of the CGST Act, provided the goods are exported within the specified time and proper documentation is maintained.

4. Customs Procedures: Temporary imports may be covered under the Customs Act, 1962, with possible duty exemptions for re-export (e.g., under Bond/Letter of Undertaking for temporary importation).

5. Place of Supply: For the demonstration service, the place of supply would determine whether it's an intra-state or inter-state transaction, affecting CGST/SGST vs. IGST applicability.

Recommendation: Consult a GST professional or customs broker to assess the specific arrangement and ensure proper documentation for temporary import and re-export.

[Shilpi Jain]

Customs duty related - On further facts one can chk if any exemption is available. Anyway drawback u/s 74 can be applied when the goods are exported in case no exemption is available at the time of import.

[Shilpi Jain]

GST - a point to note - at the time of return export since it is not a supply (no consideration) it will not be a zero rated supply, circular also there in this regard.

AI Summary

Temporary import of demonstration equipment requires import tax compliance, consideration analysis, and documented re-export or customs drawback.
Temporary import of demonstration equipment and instruments for customer use raises import-tax, supply, and re-export considerations. IGST and applicable customs duties are payable at import unless a temporary-import exemption or bond-based arrangement applies. Providing equipment for consideration may constitute a taxable supply, while a free demonstration or loan without charge may not. On return export, customs drawback may be sought where no import exemption was available. Return export without consideration does not constitute a supply or qualify as a zero-rated supply.