Case Title | M/s. MARUBENI INDIA PVT. LTD. |
Court | Karnataka AAR |
Judges | Justice M .P. Ravi Prasad Justice Kiran Reddy |
Citation | 2023 (03) GSTPanacea 85 HC Karnataka KAR ADRG 14/2023 |
Judgment Date | 20-March-2023 |
What is the interpretation of term “Exporter” was the question before Karnataka AAR. The Applicant is engaged in trading of finished goods and also in providing support services to customers located outside India.
The Applicant intend to supply domestically procured goods to customers outside India. Whether the supply of goods from the applicant to the overseas customer is zero rated supply? Now in this case there are two transactions involving the applicant.
The first transaction is of supply of goods by the manufacturer to the applicant and the second transaction is of supply of the same goods by the applicant to an overseas customer.
As per the agreement, the Indian manufacturer supplies goods, handles export compliance, files the shipping bill as the exporter, and receives the bill of lading. They own the goods until they pass India’s customs.
Essentially, the manufacturer exports the goods while holding ownership and title, as defined by Section 2(5) of the IGST Act, 2017. Thus the manufacturer is the exporter of goods. Therefore in the first transaction of supply of goods by the manufacturer to the applicant, the place of supply of goods shall be the location outside India in terms of Section 11(b) of the IGST Act, 2017.
Regarding the second transaction, where the applicant supplies identical goods to an international client, the goods are shipped from one non-taxable territory to another without entering India.
This transaction falls under Entry 7 of Schedule III of the CGST Act, 2017, and is considered neither a supply of goods nor services. The supply of goods from the applicant to the overseas customer is treated neither as supply of goods nor as supply of services.
In the Karnataka AAR (Authority for Advance Ruling), the interpretation of the term “Exporter” was examined in the context of a trading and support services provider engaged in supplying domestically procured goods to overseas customers. The applicant had two transactions: the first involved the supply of goods by an Indian manufacturer to the applicant, and the second was the supply of the same goods by the applicant to an overseas customer.
In the first transaction, the manufacturer, per the agreement, handled export compliance, filed the shipping bill, and acted as the exporter, retaining ownership until the goods passed India’s customs. The manufacturer was considered the exporter of goods as defined by Section 2(5) of the IGST Act, 2017. Consequently, the place of supply of goods in this transaction was deemed to be outside India under Section 11(b) of the IGST Act, 2017.
For the second transaction, where the applicant supplied identical goods to an international client, the goods were shipped directly from one non-taxable territory to another without entering India. This scenario fell under Entry 7 of Schedule III of the CGST Act, 2017, and was categorized as neither a supply of goods nor services. Therefore, the supply of goods from the applicant to the overseas customer was treated as neither the supply of goods nor services.
In the Karnataka AAR (Authority for Advance Ruling), the interpretation of the term “Exporter” was examined in the context of a trading and support services provider engaged in supplying domestically procured goods to overseas customers. The applicant had two transactions: the first involved the supply of goods by an Indian manufacturer to the applicant, and the second was the supply of the same goods by the applicant to an overseas customer.
In the first transaction, the manufacturer, per the agreement, handled export compliance, filed the shipping bill, and acted as the exporter, retaining ownership until the goods passed India’s customs. The manufacturer was considered the exporter of goods as defined by Section 2(5) of the IGST Act, 2017. Consequently, the place of supply of goods in this transaction was deemed to be outside India under Section 11(b) of the IGST Act, 2017.
For the second transaction, where the applicant supplied identical goods to an international client, the goods were shipped directly from one non-taxable territory to another without entering India. This scenario fell under Entry 7 of Schedule III of the CGST Act, 2017, and was categorized as neither a supply of goods nor services. Therefore, the supply of goods from the applicant to the overseas customer was treated as neither the supply of goods nor services.
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