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Foreign supplier exporting goods to FTWZ and then selling those to Indian customers not liable for GST registration

February 2, 2019[2019] 102 taxmann.com 42 (AAR - TAMILNADU)
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GST : Where applicant company being foreign supplier, located outside taxable territory, exported goods to Free Trade Warehousing Zone (FTWZ) and these goods were subsequently sold to Indian customers who clear them on payment of appropriate customs duties, applicant was not liable to registration under section 23(1) of CGST Act and TNGST Act and; for supply of warehoused goods, while being deposited in FTWZ on or after 1-4-2018, applicant was not liable to pay IGST at time of removal of goods from FTWZ to Domestic Tariff Area (DTA) under provisions of IGST Act

• The applicant company belonging to 'S' group was a leather manufacturer producing quality crust and finished leather in its industrial facilities. 'S' Group operated a global network of offices and commercial alliances in 18 countries across five continents. Group was currently supplying leathers to Indian Shoe manufacturers mainly from Thailand and Argentina.

• The applicant had sought advance ruling on question that whether sale of tanned bovine leather stored in Free Trade Warehousing Zone (FTWZ) by the applicant foreign supplier which was cleared to Domestic Tariff Area (DTA) customer in India would result in supply subject to levy under section 5(1) of IGST Act 2017 or under provisions of CGST Act, 2017 or Tamil Nadu GST Act, 2017 and rules made thereunder. And, further, whether foreign supplier being applicant, located outside taxable territory and supplying goods to DTA customers on goods stored in third party FTWZ unit was required to get registered under IGST Act 2017 or under provisions or CGST ACT 2017 or Tamil Nadu Goods and Service Tax Act, 2017 and Rules made thereunder.

• For supply of warehoused goods, while being deposited in FTWZ on or after 1-4-2018, the applicant was not liable to pay IGST at time of removal of goods from FTWZ to DTA under provisions of IGST Act in addition to duties payable under Customs Tariff Act, 1975 on removal of goods from FTWZ unit.

• On or after 1-4-2018, in the event the applicant is exclusively conducting the activity described in their application of exporting goods to Free Trade Warehousing Zone (FTWZ) and which are subsequently sold to Indian customers who clear same on payment of appropriate customs duties, they are not liable to registration under section 23(1) of CGST Act and TNGST Act.

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