GST on 'sale of goods to foreign vendor In India and sale of goods by foreign vendor in India

Dear Members I request your expert or brain storming views on following two senarios

Step - I

1. Indian manufacturer selling goods to Foreign company ( Not having office/ place of business in India - NO GST registration) but Indian manufacturer has to deliver the goods within in India to Indian customer of foreign company in India.

Assuming deliver of goods from one state to another in India and money will be received from foreign vendor in foreign currency only.

how invoicing will be done ?

GST impact ? Export ? IGST

Step - II

2. Now Indian customer has to buy goods from foreign company which are delivered in his premises for further process.

but there is no movement of goods since goods are already received in its premises for further work on instruction of foreign company by Indian manufacturer.

Money will be paid by Indian customer to foreign company

GST Impact ? Import ? RCM ?

*Note due to business modus operandi it is not possible for Indian manufacturer to directly bill to Indian customer money has to compulsorily route through foreign company

Regards

Hey Satish, your scenarios are quite interesting and involve some nuances under GST related to domestic supply, export, and import. Let me break down both steps clearly:

Step I: Indian manufacturer → Foreign company (no Indian GST registration) → Delivery to Indian customer within India

Facts:

Indian manufacturer sells goods to foreign company (no GST registration in India).
Delivery happens inside India to an Indian customer of the foreign company.
Movement of goods is intra-India (one state to another).
Payment received from foreign company in foreign currency.

Key Points & GST Implications:

Since goods are delivered within India (to Indian customer’s premises), this is not an export.
Even if the foreign company is abroad and pays in foreign currency, the supply is within India.
Therefore, GST is applicable on this transaction as a domestic supply.
Indian manufacturer must raise a tax invoice to the foreign company including applicable GST (CGST + SGST or IGST depending on intra or inter-state).
Since delivery is interstate (one state to another), IGST applies.
Payment in foreign currency does not exempt GST. The value will be converted to INR for GST calculation.
The foreign company is not registered in India, so they can't claim ITC, but that doesn't affect supplier’s GST liability.

Step II: Indian customer buys goods from foreign company (goods already in India with Indian manufacturer)

Facts:

Goods physically present in India at Indian manufacturer’s premises.
Foreign company sells goods to Indian customer.
Indian customer will pay foreign company.
No movement of goods at time of sale since goods are already in India.
Foreign company is abroad and has no GST registration in India.

GST Implications:

This is a supply by a foreign company to an Indian customer.
Since goods are imported into India, GST is payable under Reverse Charge Mechanism (RCM) by Indian customer.
Indian customer is liable to pay Integrated GST (IGST) on import of goods.
Import of goods means goods entering India’s customs territory — here, since goods are already in India physically (probably imported previously), it's like a domestic transfer.
However, if foreign company is not registered in India, for GST compliance foreign supplier must register or Indian recipient must pay GST under RCM.
Indian customer should pay GST on RCM basis and comply with GST provisions.
Customs duties may or may not apply depending on import formalities.

Summary Table

Scenario	Supply Type	GST Applicability	Who Pays GST	Notes
Step I	Domestic supply	Yes, IGST applicable	Indian manufacturer	Foreign company is customer; goods delivered within India; payment in foreign currency
Step II	Import of goods	Yes, IGST under RCM	Indian customer (buyer)	Foreign supplier no GST registration; Indian buyer pays GST under reverse charge

Additional notes:

Indian manufacturer should maintain clear records of invoices and payments in foreign currency.
Foreign company may need to register under GST if regularly doing business in India.
Indian customer should consult on import customs compliance and GST payment under RCM.
Proper contracts and documentation are vital for audit trail and tax compliance.