Whether Merchant trade transaction' involving goods movement in non-taxable territory liable to IGST

Last updated: 11 November 2021

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Quick Summary

The Gujarat Appellate Authority for Advance Ruling (AAAR) determined that merchant trade transactions (MTT) involving the movement of goods in non-taxable territories are liable to IGST before February 1, 2019. After this date, such transactions are not subject to IGST as they are treated as neither a supply of goods nor services under Schedule III of the CGST Act. The AAAR's decision was based on an amendment to Schedule III effective from February 1, 2019.

Court :
Gujarat Appellate Authority for Advance Ruling("the Gujarat AAAR")

Brief :
The Hon'ble Gujarat Appellate Authority for Advance Ruling("the Gujarat AAAR") in the matter of M/s. Sterlite Technologies Limited [Advance Ruling (Appeal No. GUJ/GAAAR/APPEAL/2021/13 dated March 08, 2021] held that Merchant trade transaction ("MTT") involving movement of goods in non-taxable territory is liable to Integrated Goods and Services Tax, 2017 ("the IGST Act") which are done before February 01, 2019 and not leviable after this date as Schedule III of the Central Goods and Services Tax Act, 2017 ("CGST Act") (i.e., activities or transactions which shall be treated neither as a supply of goods nor a supply of services) was amended w.e.f.February 01, 2019 to include MTT.

Citation :
Appeal No. GUJ/GAAAR/APPEAL/2021/13 dated March 08, 2021

Daily Limit Reached