Dear Experts,
Issue : Application of Section 10 or Section 11 of the IGST Act, for an Sale made.
Details of the Case :
Party A : Supplier of Goods ( Located in India: Assume - Karnataka)
Party B : " Ship to" (Located outside India : Assume - France)
Party C: " Bill to" (Located In India : Assume - Tamil Nadu )
Party A has exported goods from Karnataka to Party B in France on the instruction of Party C.
Also Note: B and C are related parties and payment for the sale will be made by Party A will be made by Party C.
Query:
Do we apply Section 10 of IGST and consider this as a domestic sale and charge IGST or Consider this as a export sale and not charge IGST ( Assume the vendor complies with LUT)?
Applicable provision as per querist:
Export Definition as per 2(5) of the IGST act
Section 10 of IGST ACT- Place of Supply other than EXIM goods
Section 11 of IGST ACT - Place of Supply for Imported Goods and Exported Goods.
Analysis:
In my opinion,
The transaction is an export and no GST needs to be charged on the sale.
Reason:
1) Transaction satisfies the Export definition of 2(5) IGST Act.
2) As this transaction satisfies Export definition we consider the same as EXIM goods and apply Section 11.
Also one may contend that as per Section 2 (93) of the CGST Act, " Recipient of Goods or Service" needs to be considered and as the PARTY C here would be " Recipient of Goods or Service" as he is paying the consideration we would apply section 10(2) of the IGST Act and consider this as a domestic sale and charge IGST.
The answer here is, section 2(93) beings with the words-" unless the context otherwise requires, the term “Recipient” of supply of Goods/ Services has been defined" , therefore we consider this a general provision and construct the law with the specific provision of 2(5) and consider this as an export.
EXPERTS: KINDLY LET ME KNOW YOUR VIEWS ON THE SAME.
CAclubindia
