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GST for nri purchasing in india but taking it abroad

27 June 2017

what type of GST ie CGST AND SGST or IGST will be charged if a nri or foreign customer takes goods as a consumer and he wants his foreign address on invoice and takes the goods abroad with him (we are supplying goods at our store only)

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13 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 27 June 2017

You have to issue bill as usually given to consumer with applicable CGST & SGST......

Because POS is your store. (Address on bill will not affect POS)

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Devansh Jain (...) (1269 Points)
Replied 27 June 2017

I find the answer by Mr. Dhirajlal incorrect...

All supplies to tourist are inter-sate supplies and attract IGST (refer sec 8 of IGST Act)

Further, the tourist will be eligible for refund of IGST paid by him on goods being taken out of India (refer sec 15)

For this purpose, "Tourist" is defined as a person who is not normally resident in India & stays in India for max 6 months.

Hence, CGST+SGST applicable only for tourist if staying in India for above 6 months (no refund of CHST+SGST)

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 27 June 2017

Thanks Mr. Devansh Jain for clarification.

Would be glad if you complete the thread by enlighting on steps to be followed for refund of IGST by the tourist.....

Devansh Jain (...) (1269 Points)
Replied 27 June 2017

As far as the query of Mr. Vipin is concerned, I believe he must have got the answer that he need to know the period of stay of the tourist (and his purpose of visiting India should be for legal immigration only) to check whether to charge CGST+SGST or IGST in the invoice issued to the tourist..

In addition to this, for the procedural aspect of redund of IGST by the tourist, the law is not really very clear. As per the International practice in the countries where GST is already implemented, a simple return/documentation is to be filed by the tourist at the port-of-exit only to get the refund of taxes paid by him. I would not be able to answer precisely to give 'steps for refund', but I will try to share my views on this ambiguous & open-ended law..

The section 15 (OF IGST Act) uses language "in such manner as may be prescribed sub ject to such conditions & safegaurds....". Hence a specific notification in this regard can be expected soon... In my opinion, there can be 3 possibilities: First possibility that governemnt can notify the sales to tourist as deemed export (under sec 147) or second possibility to add the category of tourist as a special category (under sec 55). In both these cases, an application would have to be filed for refund similar to normal refund in FORM RFD-01 or FORM RFD-10 (Through option of Facilitation Centers only as these tourists would not be registered in the common portal by themselves). Third possibility could be a seperate notification altogether in which instant refund would be given at the port-of-exit as like in many countries....

Let's wait and watch what the Governemnt decides...

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 27 June 2017

Let's wait and watch what the Governemnt decides...

Nicely explained..........

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Devansh Jain (...) (1269 Points)
Replied 27 June 2017

Thank you sir. Appreciation words from someone like you means a lot!

1 Like

Vipin Kumar (127 Points)
Replied 27 June 2017

Thank you

1 Like

Devansh Jain (...) (1269 Points)
Replied 27 June 2017

your welcome........

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 28 June 2017

Dear Devansh,

I really appreciate your basis of analysis based on the Rules incorporated........

Well, will you please throw more light over the issue:

Based on fact that:

"All supplies to tourist are inter-sate supplies and attract IGST (refer sec 8 of IGST Act)"

Now: For Composition dealers (MR. Vipin Kumar has not clarified about it in his query); they cannot supply any goods to tourist (of course, tourist meaning in actual sense, not staying long), because they cannot issue Tax invoice with IGST.

So, there arises a situation where:

(a) All the dealers must check customer’s place of origin, as soon as any invoice is made; specifically dealers under composition scheme and refuse them to supply any goods, if s/he is tourist.

(b) Tourist must be informed on arrival at airport, not to purchase any goods from dealers who are under composition scheme or URD.

Please correct me, if I am wrong.........

Devansh Jain (...) (1269 Points)
Replied 28 June 2017

Exactly, I totally agree..
both the dealers as well as tourists need to be well informed!

infact, talking about my own clients, I already tell same sentence to everyone that if you are going to opt for composition scheme, don't sell inter-state or through e-commerce or to tourists..

PS: There can easily be workaround by the composition dealer to disguise the bill in someone other's name if the goods are of 'personal effect' and tourist has no problem. Also since the composition quarterly return does not seeks bill wise details, the department will have a hard time catching such workarounds..

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 28 June 2017

That's Great.

So, as per your advise to Mr. Vipin Kumar (if he is under composition scheme), would be that he should refuse to supply goods to an outside customer in case he is liable to issue tax invoice; because the PoS is to be considered based on the destination of the customer and not his shop.

Devansh Jain (...) (1269 Points)
Replied 28 June 2017

yes.
As per the gst law, any sale to tourist is a inter-state supply and a composition dealer cannot make inter-sate supplies.

You may correct me if I am wrong and suggest correction supported with relevant sections/rules..

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 28 June 2017

No, I mean to say, what should be point of Supply for shop owner like Mr. Vipin Kumar?

If he is to judge the supply of his goods from his shop or based on the place from the customer's origin? Or on what base, he can charge IGST or SGST+CGST over his supply (when customer takes delivery of goods at his shop, but tourist from another state)?