In a recent announcement, the Finance Ministry has said that no GST invoice will be required for the goods that were taken abroad for exhibitions or other kinds of export promotion events and are brought back to India within six months.
The ministry further said that most of the exporters were having problems due to a lack of clarity about the GST procedure for the goods that are exported from India.
The applicability of GST during such goods sale was a matter of concern for most of the exporters.
Issuing clarification on GST applicability for exported goods, the ministry said that goods that were taken outside India on a consignment basis for the exhibition purpose do not qualify as supply under GST, but such products must be carried outside with a “delivery challan.”
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The ministry said, “Since taking such goods out of India is not a supply, it necessarily follows that it is also not a zero-rated supply. Therefore, execution of a bond or LUT (Letter of Undertaking), as required under section 16 of the IGST Act, is not required.”
It was also mentioned in the clarification that goods that were exported from India for the exhibition purpose must be sold or brought back of India with a period of six months, starting from the date of removal or dispatch.
Although if the exported goods for exhibition purpose are not sold or brought back of India within six months than the tax authorities would consider as a supply that has taken place.
In this regard, the ministry stated, “In this case, the sender shall issue a tax invoice on the date of expiry of six months from the date of removal, in respect of the quantity of goods which have neither been sold nor brought back. The benefit of zero-rating, including refund, shall not be available in respect of such supplies.”
If the goods exported are sold abroad, full or partially, within six months, then the authorities would mark it as a valid supply under GST, in regard to the quantity so sold on the date of sale.
The sender of goods in such cases will also be required to issue a tax invoice against the sold goods. The supply would be counted as a zero-rated supply during the invoice generation.
Although, the refund for such supplies would be available only as a refund of unutilised Input Tax Credit (ITC), rather than a refund of Integrated GST.
“No tax invoice is required to be issued in respect of goods which are brought back to India within the period of six months,” the ministry mentioned.
