SALES OF SPARE PARTS IN ABROAD

[SURYAKANT MITHBAVKAR]

Our technician carry some spare parts while travelling aboard for installation/service purpose. While doing installation technician has use that spare parts and customers paid for that in US Dollars can we book that US Doller in our books showing export sale of Spare and deposit in Bank whereas no evidence available to show export like shipping bill, etc. kindly give us advice under VAT LAW whether it is exempt from VAT or not

[YAGAY andSUN]

If such spare parts were not declared at time of travelling to foreign country by the engineers of your company, then your company will not get the export benefits.  I presume that these spareparts were carried by the engineers of your company as trade samples in their baggages.  Further, the HOB Vol. 1 para 2.31 has been amended w.e.f. 14-05-2011 and you may check with your export promotion councils with whom you are registered.

[YAGAY andSUN]

For vat exemption you would have to submit either Shipping Bill (EP) Copy or BRC.

 

AI Summary

VAT exemption for exported spare parts requires shipping bill or bank realisation certificate to claim export benefits. VAT exemption for spare parts used by technicians abroad hinges on documentary proof of export: if parts were not declared on departure they may be treated as trade samples and export benefits will not attach; to claim VAT exemption a Shipping Bill (EP) copy or a Bank Realisation Certificate must be submitted.