TaxTMI 
TaxTMI 
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 whether we have to charge sales tax or not ?
Sales tax applicability on export
31 Aug 2007 
2 Replies 
1300 Views Asked by
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Interstate export classification may exempt local sales tax when goods are consigned to a SEZ warehouse.
Whether sales tax applies when goods sold to a foreign buyer are paid in foreign exchange but consigned to a SEZ warehouse hinges on treating the supply as an interstate/export transaction and on export documentation. One reply concluded the facts satisfy section 5 of the CST Act so local sales tax is not applicable. A related concern notes assessing officers may refuse courier airwaybills as proof of export, creating assessment and penalty risk for e commerce exporters. (AI Summary)
Whether sales tax applies when goods sold to a foreign buyer are paid in foreign exchange but consigned to a SEZ warehouse hinges on treating the supply as an interstate/export transaction and on export documentation. One reply concluded the facts satisfy section 5 of the CST Act so local sales tax is not applicable. A related concern notes assessing officers may refuse courier airwaybills as proof of export, creating assessment and penalty risk for e commerce exporters. (AI Summary)