Zero rated supply in GST

Save Share

This query is : Resolved

Quick Summary

If you're an Indian resident sourcing goods from China for direct shipment to a US retail company, this activity is not considered a supply under Indian GST law. According to Schedule III, paragraph 7, goods moved from one location outside India to another without entering India are neither a supply of goods nor services. Therefore, it's not a zero-rated supply or an export under GST, though any associated service or income may be taxable under income tax.

Apratim Barua

Apratim Barua (Querist)

06 May 2022 I am working with a partner to start a retail company to sell goods in the USA, sourcing them mainly from China. The goods will not land in India and will be shipped to the USA directly from China. I am not sure how GST works here. Does the income come under zero-rated supply for exports? Any advice will be appreciated. Thank you in advance.

CA Suresh Jain

CA Suresh Jain (Expert)

07 May 2022 Assuming you are residing in India and carrying on the activity of sourcing goods from China for supply to USA retail Company directly from China. This is not a Supply at all and does not fall under the Indian GST law.

Message likes : 1 times

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

28 October 2026 The specific basis is Schedule III para 7: supply of goods from one place outside India to another without the goods entering India is neither supply of goods nor services, so it isn't zero-rated or reported as export — though any service or income component is taxable under income tax.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now