GST Authority has now said that now overseas sale and purchase of Goods is subject to GST.
It is observed that domestic organizations buy goods from foreign countries and sell to other countries. Now those firms who are into export business will have to pay GST on relevant transactions.
Even if the firm says that its products will not enter the territory of India, then also they will have to pay a certain amount of GST on exports, as disclosed by Authority of Advance Ruling (AAR).
Let us understand this GST update in detail.
GST on Overseas Sale and Purchase of Goods
Here’s what the AAR has stated & ruled,
“It appears that the transaction is covered under the ambit of inter-State supply and is neither exempted nor covered under export of services. Thus, the theory of elimination takes us to the conclusion that such supplies will be subject to the levy of IGST (integrated GST)”.
The statement says that the GST on exports would apply to the MTT in which the applicant will receive orders from various customers. Those customers will give orders who are living outside India, and as per their order requirement, the vendor’s responsibility will be to ship those orders to respective locations where the consumers are.
GST invoicing by the vendor
While doing this process, it will be the responsibility of the vendor who is having the GST registration, to issue an invoice on the applicant related to the payment mode. Meanwhile, the transaction process of goods will keep functioning.
Vendors can easily raise invoices on Instabill, the smart GST invoicing app.
Tanushree Roy, who is working as a director of Nangia & Co LLP stated that till now GST is evolving and it is impossible to suddenly conclude it with multiple provisions of the GST legislation from where the supply of goods is carried.
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