XYZ Ltd. sending Tools to a company located in UAE. The Importer will use these tools for inspection and after completion of work these tools will be returned back to XYZ as it is. XYZ not going to charge any value for the same to the importer. 1)Can XYZ send it under LUT without payment of GST? 2) At the time of reimport whether normal import procedure to be followed by XYZ by paying all import duties including IGST?
Kaustubh Karandikar Asked question October 15, 2020
Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 21/2019 to clarify the payment of integrated tax on the reimport of goods which had been earlier exported either for participation in exhibition or on consignment basis.
Key points of the Circular are:
- It is clarified that the activity of sending / taking the specified goods (i.e. goods sent / taken out of India for exhibition or on consignment basis for export promotion except the activities satisfying the tests laid down in Schedule I of the CGST Act, 2017) out of India do not constitute supply within the scope of Section 7 of the CGST Act,2017 as there is no consideration involved and the same will also not be considered as zero rated supply and no tax would be payable on the same.
- It has further been clarified that in the case of re-import of specified goods since no integrated tax was required to be paid for at the time of taking these specified goods out of India as the activity was not considered to be supply, hence the condition requiring payment of integrated tax at the time of reimport of goods is not applicable.
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Frah Saeed Changed status to publish October 16, 2020