GST on goods sold which will later be exported

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When a UK company sells goods domestically that will later be exported, the initial sale is subject to the standard GST rate. However, the company exporting the goods can treat this as a zero-rated supply. They can then claim a refund for the GST paid on the initial purchase from the government.

Piyush

Piyush (Querist)
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09 December 2024 Company A sells goods to Company B, Later Company B will Export the goods.

in above case, knowing in advance that Company B will Export the goods,
should company A charge GST 18% on sales or to charge any concessional rate of GST to Company B?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 December 2024 No concession when goods sold to company B if the sell is within Indian territory.

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Piyush

Piyush (Querist)
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09 December 2024 So, Company A will sell at applicable GST ie 18% to Company B, even though goods are to be exported by Company B and Company B will export it without adding GST.
Please correct if anything wrong.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 December 2024 Any supplies made by a registered dealer as an export or supply to an SEZ qualifies for Zero Rate Supplies in GST. So, company B will export it at zero rate under bond or Letter of Undertaking; and also claim refund of GST paid to company A, from Government.

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