TMI Blog2023 (3) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... side India while he is holding ownership and title of the goods, i.e., he exports the goods in terms of 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. In respect of the second transaction involving the supply of the same goods by the applicant to overseas customer, it is observed that the goods are supplied from a location outside India to a location outside India, i.e., the supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India. The said transaction is covered under Entry 7 of Schedule III of CGST Act, 2017 as a transaction or supply which shall be treated neither as a supply of goods nor a supply of services. The supply of goods from the Applicant to the overseas customer is treated neither as supply of goods nor as supply of services. - KAR ADRG 14/2023 - - - Dated:- 20-3-2023 - DR. M.P. RAVI PRASAD AND SRI. KIRAN REDDY T, MEMBER Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of certain goods which will be domestically procured from vendors located in India. The purchase order for such goods would be issued by the Overseas Customer to the Applicant, who in turn would place a back-to-back order for procurement of the required goods upon domestic manufacturer / vendor (herein after referred to as Indian Manufacturer) of the goods. 4.3 The applicant, for ease of business and logistical convenience, would instruct the Indian manufacturer to ship the goods from its location/factory directly to the location of the Overseas Customer and accordingly the goods would be shipped from the Indian Manufacturer's premises to a foreign destination without the goods being physically delivered by the Indian manufacturer to the applicant. The Indian Manufacturer, as part of the contractual arrangement with the applicant, is responsible for undertaking the applicable Customs Duty compliances such as documentation for outbound customs clearance as Exporter and filing of Bill of Lading for transportation of goods to the Overseas Customer on the direction of the Applicant. 4.4 To the extent of outbound freight from the port in India to the location of the Overs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th complete address of delivery outside India Buyer Marubeni India Pvt. Ltd., i.e. the Applicant The details of the invoice for the supply from Indian Manufacturer to the Applicant would be as under: Particulars Name Supplier Indian Manufacturer Billed to Marubeni India Pvt. Ltd., i.e. the Applicant Ship to Overseas Customer along with complete address of delivery outside India The applicant would be raising the invoice on overseas customer, for supplies made by the applicant with the following details. Particulars Name Supplier Marubeni India Pvt. Ltd., i.e. the Applicant Bill to / ship to Overseas Customer along with complete address of delivery outside India Ship from Location of the Indian Manufacturer 4.7 The applicant would hand over the Bill of lading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is as under.- (5) export of goods with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India 5.4 A perusal of Section provides that taking goods out of India to a place outside India would be treated as export of goods. In the present case, the Indian manufacturer is undertaking the Custom Clearance as Exporter and undertaking issuance of bill of lading for transfer of title of goods. Such Bill of lading is transferred to Applicant from Indian Manufacturer for transferring ownership of the goods once, goods reach at port of Export beyond the Customs frontier. The Applicant further transfer such Bill of Lading to Overseas Customer along with its invoice to supply such goods to Overseas Customer and allow him to get such goods cleared from Overseas Customer's Country port. 5.5 Accordingly, in the facts of the present case though Customs formalities are being undertaken by the Indian Manufacturer and shipping bill is filed by the Indian Manufacturer, but goods are actually being taken outside India by the Applicant. Accordingly, in our view, for the purpose of determination of tax on the transaction, the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be subject to GST. PERSONAL HEARING PROCEEDINGS 6. Ms. Neha Kishore, C A and Sri. Devansh Gupta, C A, Ernst Young LLP Authorised Representatives of the applicant appeared for personal hearing proceedings held on 29-09-2022 and reiterated the facts narrated in their application. However on request an additional personal hearing was granted on 10-11-2022 and Ms. Neha Kishore, C A, Sri. Devansh Gupta, C A, Ernst Young LLP Authorised Representatives of the applicant along with Sri. Ranjit Ahluwalia, General Manager (Finance Accounts) appeared for personal hearing through video conference and submitted their arguments. FINDINGS DISCUSSION 7. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matters and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 8. We have considered the submissions made by the applicant in their application for adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... currency out of their foreign currency account maintained in India. The Applicant also stated that alternatively the Overseas Customer will open a Transferable LC in Foreign Currency in favour of applicant and the applicant, in that case, would then partially transfer the same LC in favour of the Indian Manufacturer for the price agreed upon and such transactions are covered under permitted transactions for EEFC accounts as allowed by RBI and FEMA guidelines. (v) The Applicant, in their books of accounts, would record the transaction between the Applicant and the Indian Manufacturer as 'purchase of goods' and the transaction between the Applicant and the Overseas Customer as 'sales of goods'. 11. From the above facts of the case, we find that 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. 12. As per the agreement with the applicant, the Indian manufacturer undertakes to supply the goods and complete all the export compliances including filing of Shipping Bill as an export ..... X X X X Extracts X X X X X X X X Extracts X X X X
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