Export without transfer of goods

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2013 hello sir,

i have a query with regards to export.there is a company A in India who sale goods outside India but possession is not transferred outside..so is this transaction arise to export????

CA Suresh Jain

CA Suresh Jain (Expert)
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25 August 2013 What do you mean possession is not transferred outIndia side

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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24 July 2024 Export, in the context of trade and commerce, typically involves the transfer of goods or services from one country to another. The key aspect of export is the physical movement of goods or the delivery of services outside the territorial jurisdiction of the exporting country.

Based on your query, where Company A in India sells goods but retains possession within India, it raises a nuanced scenario that may not fit the traditional definition of export. Let's break down the implications:

### Export of Goods:

For a transaction to qualify as an export of goods:

1. **Transfer of Possession:** Generally, there must be a transfer of possession of goods from the seller (Company A) to the buyer outside India. This means the goods physically leave India and are delivered to the overseas buyer.

2. **Customs and Documentation:** Export of goods requires compliance with customs procedures, such as filing a shipping bill and other export declarations. These documents confirm that the goods have exited the country.

3. **Legal Definition:** As per legal definitions in various jurisdictions including India, export typically refers to the physical movement of goods across borders for the purpose of trade and consumption outside the exporting country.

### Possession Retention Scenario:

If Company A in India sells goods but retains possession within India:

- **Legal Considerations:** This scenario does not align with the traditional definition of export where physical movement of goods is a fundamental requirement.

- **Taxation and Compliance:** Depending on local tax laws (such as GST in India), the transaction may still be considered a sale but not an export for tax purposes. It could be treated as a domestic sale subject to applicable taxes and regulations.

- **Documentation:** Since the goods do not physically leave India, export-related documents like shipping bills and export declarations would not apply.

### Conclusion:

Based on the information provided, the transaction described (where possession of goods remains in India despite a sale to a foreign entity) does not typically constitute an export under standard international trade practices and legal definitions. It's essential to review the specific circumstances with a qualified tax advisor or legal expert to ensure compliance with local laws and to determine the appropriate classification of such transactions for taxation and regulatory purposes.

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