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GST on goods not entering in India

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sameer shaikh

Accountant

70 Points Posted on 30 October 2024

Dear Expert,

We purchased goods from china and directly dispatched to germany, goods did not enter in India. Please let us know GST impact on this transaction. We need to pay GST?
How will we show this transaction in accounting?
How will we show this transaction in GST Return?

Thank you.

Replies (3)

Quick Summary

If you purchase goods from China and dispatch them directly to Germany without them entering India, this is considered an export. Under GST laws, such transactions are zero-rated supplies, meaning no GST is payable. You'll need to maintain documentation like invoices and shipping bills to prove the direct dispatch. Record this as an export sale in your accounts and report it as a zero-rated supply in your GSTR-3B, potentially requiring an export declaration in GSTR-1.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 30 October 2024

Since the goods didn't enter India, this transaction is considered an export.

As per GST laws, exports are zero-rated supplies, meaning no GST is payable.

However, you may need to provide documentation to prove the goods were directly dispatched to Germany and didn't enter India.

This could include: - Commercial invoices - Bill of lading or airway bills - Customs documents For accounting purposes, you can record the transaction as: -

Sales (export) - XXX (value of goods) - Receivables (XXX) In your GST return (GSTR-3B), report this transaction as: -

Exports (zero-rated supplies) - XXX (value of goods) Additionally, you may need to file an export declaration (Table 6A of GSTR-1) and provide details of the export

Rajendra Prasad

Employee Private

1913 Points Posted on 01 November 2024

As per Clause 7 of Sehedule III of CGST Act such transaction has been classified as "Neither a supply of goods nor a supply of services". Hence there is no any GST liability. And has to show the transaction as Non-GST transaction in the books of accounts and also in return.