The Karnataka Authority of Advance Ruling (AAR) has in its recent ruling in the case of Pine Subsidiary Industry has ruled that separate GST registration is not required at the place of importation in case the importer does not have any place of business at such place.
Facts of the case:
- The applicant, Pine Subsidiary Industry is engaged in import and trading of Gum Rosin and Damar Battu etc.
- The applicant clears the said goods from Chennai Sea Port and wishes to supply the same to various states directly from the Customs Sea Port in Chennai. While filing the bill of Entry, the applicant furnishes the GSTIN of Bangalore location (KA) and custom clears these goods.
- The applicant stated that once the goods are cleared, in certain cases, they wish to supply these goods to its customers directly from the Customs Port either in Tamil Nadu or Andhra Pradesh or surrounding states.
- In some cases, the applicant also wished to directly deliver to customers in Karnataka. The primary reason for transporting the goods directly to customer location (either in Tamil Nadu, Andhra Pradesh, etc.,) is to save on the time and the transportation cost, else the dealer would have to bring the goods to Karnataka and then re-deliver the goods to Andhra and Tamil Nadu.
Issue on which ruling was sought:
The applicant has sought the advance ruling on the issue whether it can raise an invoice from its registered office in Karnataka for the supply of imported goods received at Chennai port, to customers directly situated in another State, charging IGST.
Further, the applicant also sought clarification on whether the registration in Bangalore (Karnataka) can be considered as the location of supplier for purpose of raising the invoice. The applicant also seemed clarification on the eligibility of the input tax credit claim.
Order of AAR: Deliberation and Ruling:
- AAR noted that as the applicant has stated that he does not have any place of business in Tamil Nadu and does not maintain any office / fixed establishment in Tamil Nadu or any other State in India other than Karnataka, the applicant is not required to take any separate registration at the place of importation.
- AAR observed that Section 20 of the IGST Act read with Section 16 of the CGST Act,2017 provides that IGST paid on import of goods can be utilised as the credit of the input tax if such imported goods are used in the course or furtherance of his business.
- AAR stated that Explanation to Section 16(2) of the CGST Act provides that where the goods are directly delivered to a customer under bill to ship to model , then it would be deemed to have received the goods even though the goods are shipped to the end customer location directly.
In view of the above deliberations, the coram of M.P.Ravi Prasad and T.Kiran Reddy ruled that the applicant can issue tax invoice with IGST to the customer outside Karnataka as per section 20 of the IGST Act 2017 read with section 31 of the CGST Act 2017 for the interstate transaction as provided under section 7(1) of the IGST Act 2017, when the goods are directly dispatched from the port of import with invoicing done from the registered place of business and a separate registration need not be obtained at the place of importation.
The AAR also adjudged that the applicant can do the transaction using Karnataka GSTIN. In case of issuance of e-way bill, the applicant can mention the GSTIN of Karnataka and the place of dispatch as Chennai sea port.
READ / DOWNLOAD ORDER:
***
Subscribe to our portal and get FREE Tax e-books, quality articles and updates on your e-mail.
Resolve your GST queries from national level experts on GST free of cost.
Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
