Sales tax applicability on export

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We would be selling our products to a company that is based in the USA and receiving the payment in foreign exchange. However, our buyer has instructed us to dispatch the materials to a warehouse in SEZ. The export invoice /packing list etc. have the name of the buyer as our customer in the USA but the consignee is the warehouse in SEZ a/c buyer name. ARE1 and Bill of Export is also being filed. Our buyer states that no sales tax is payable as this is export transaction. Buyer can not issue Form I as he is not an Indian company & the warehouse in SEZ cannot issue Form I as they are only providing warehousing service and not consuming the materials. Please advice. Regards, Bimbita

AI Summary

U.S. Buyer Exempt from Sales Tax on SEZ Export Transaction Under Section 5 of CST Act A company plans to sell products to a U.S.-based buyer, receiving payment in foreign currency. The goods are to be dispatched to a warehouse in a Special Economic Zone (SEZ) in India, with export documentation listing the U.S. buyer as the customer and the SEZ warehouse as the consignee. The buyer claims no sales tax is due, as it is an export transaction. However, they cannot issue Form I, and the SEZ warehouse cannot either, as they only provide warehousing services. A response suggests that the transaction meets the conditions of section 5 of the CST Act, indicating no local tax applies.