XYZ (Japan) will be selling the goods to PQR(India) i.e. Invoice of XYZ will be on PQR. PQR further issues an Invoice on ABC (India)). ABC will be further selling the goods / issuing the invoice on EFG (Sri Lanka). However, the goods will be physically moved from XYZ(Japan) to EFG (Sri Lanka). Will this be treated as an export for PQR and whether PQR had got any GST liability on this?
As per para 7 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 are not treated as supply of goods. Being not a supply and as goods are not taken out of India which is precondition for export of goods as per definition u/s 2(6) of the IGST Act,2017, it will not be exports. However as same is not supply no liability will arise on transaction between PQR and ABC.
It is worth mentioning here that Gujarat AAR in case of Sterlite Technologies have adjudged that applicable GST is payable on goods sold to customer located outside India, where goods are shipped directly from vendors premises (located outside India) to customers premises. We do not agree with the judgement, however the matter would be litigated by the Deptt.
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