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TMI Blog2018 (9) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... house - It is, therefore, not correct that submission of endorsed copies of ARE-3 to the concerned Excise Authority at Haldia, where the Applicant’s factory is located, is evidence of export. It is evidence of re-warehousing of the goods cleared duty free from the factory. Actual evidence of export is ARE-1, endorsed by the Customs Authority, submitted before the appropriate Excise Authority at the export warehouse, failing which the exporter is liable to pay the duty with interest. Removal without paying duty (under Bond) from Haldia Refinery to the export warehouse at Raxaul, therefore, does not as such amount to export. The goods re-warehoused at Raxaul Depot are not moved from Haldia under specific export order and can be either cleared for home consumption or exported. It is, therefore, far from a mere transit point, but the point of storing and final clearance. The final clearance being made from the export warehouse at Raxaul, it is the Bihar Unit that is responsible for export or payment of duty if diverted to home consumption - Clearly, the transportation from Haldia to the export warehouse at Raxaul is no measure of actual export. Input tax credit - export or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting through its various offices, including its depots, terminals, LPG bottling plants, spread across India and are registered under the Goods and Services Tax, 2017, in all the States/Union Territories of India, except in the Union Territory of Lakshwadeep. Since each unit has separate and independent registration under the GST Act, such units are to be considered as distinct persons in terms of Section 25(4) of the GST Act. The GST registration in the state of West Bengal is 19AAACI1681G1ZM. For purpose of this Advance Ruling the West Bengal Unit of Indian Oil Corporation, holding GSTIN 19AAACI1681G1ZM, will be considered as the Applicant. 3. The Application states that: a. The Applicant exports HSD, ATF and other refined petroleum products to Nepal under the terms and conditions laid down in an agreement dated 27/03/2017 (hereinafter referred to as the Agreement ) between Indian Oil Corporation and Nepal Oil Corporation Ltd (hereinafter referred to as NOC ). ATF, Motor Spirit and HSD, sourced from the Applicant s manufacturing unit (refinery) at Haldia in West Bengal are transported by Rail to the Indian Oil Corporation s warehouse at Raxaul in Bihar. The supply fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be an exempt supply. 5. The officer concerned opposes the argument of the Applicant on the grounds that the goods have been transferred to a warehouse in Bihar and subsequently exported from the said warehouse. This is essentially a case of stock transfer of non-taxable goods of Indian Oil Corporation from its West Bengal Unit to its Bihar Unit, (these two units are registered as distinct persons under the GST Act), and as GST is not levied on the goods so transferred to Bihar, the supply to the Indian Oil Corporation s Bihar Unit is exempt supply for the Applicant and no input tax credit is available thereon. This is in accordance to Section 17(2) of the GST Act. 6. The officer concerned also states the goods, when exported from the warehouse in Bihar is zero rated supply, and Indian Oil Corporation Ltd has admittedly reported the export in the returns for its Bihar Unit. GST paid on inward supplies of inputs and input services in Bihar can, therefore, be claimed by the Bihar Unit. But the GST paid on freight for transportation from Haldia Refinery to Raxaul Depot is billed on the Applicant, Indian Oil Corporation s West Bengal Unit, place of supply of the input service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ro rated supply of goods b. Whether the transportation to Raxaul warehouse is to be considered to be for export of supply to Nepal or transfer of goods to Indian Oil Corporation s Bihar Unit for ultimate export to Nepal. 9. Art 366 of the Constitution has been amended by the 101st Amendment of the Constitution and clause 12A inserted, which defines GST as tax on supply of goods and services or both except taxes on supply of alcoholic liquor for human consumption. It does not exclude petroleum products, namely petroleum crude, HSD, ATF, petrol and natural gas, from the ambit of GST. However, under clause 5 of Art 279A of the Constitution these goods shall not be subject to the levy of GST till a date notified on recommendation of the GST Council. Provisions of section 9 (2) of the GST Act gives expression to this arrangement. This leads to introduction of the concept of non-taxable supplies under section 2(78) of the GST Act. It means supplies on which GST is not leviable. Exempt supplies, as defined under section 2(47) of the GST Act, includes non-taxable supplies. Under section 2(112) of the GST Act, turnover in State means inter alia the aggregate value of all taxable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and section 2(5) of the IGST Act is that it occasions movement of the goods to a place outside India. 12. In the present context, the question, therefore, boils down to whether movement of goods from Haldia Refinery terminates at Raxaul Depot in Bihar when it takes delivery from the Railways, or continues after trans-shipment to other modes of transport for taking it out of India to Nepal. The goods are supplied to the recipient (in this case the Bihar Unit) in India if the movement terminates at Raxaul. In such cases it will be an inter-state supply to a distinct person as defined under section 25(4) of the GST Act, and the place of supply shall be determined under section 10(1)(a) of the IGST Act. If, however, Raxaul Depot is a mere transit point for trans-shipment of goods being moved from Haldia Refinery under specific export order, it will be export of goods from the West Bengal Unit to the recipient outside India (in the present context NOC). 13. The Agreement with NOC is no export order. It is, according to clause 3(a), an umbrella agreement between the parties for a period of five years with effect from 01/04/2017. According to the Agreement, NOC will raise specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngth of the Bond so executed. The concerned Central Excise Authority in Bihar shall issue certificate of removal in Form CT-2 indicating the details of the Bond executed by the exporter. The exporter fills up the relevant information in CT-2 and makes provisional debit in the Running Bond Account equivalent to the duty payable. The consignor (i.e. Haldia Refinery) prepares an application for removal in Form ARE-3, indicating the serial number of the corresponding CT-2. On receipt of the goods at Raxaul Depot the officerin- charge of the warehouse countersign the ARE-3 and dispatch it to the Haldia Range Excise Authority as proof of re-warehousing of the goods. At the exporter s end the provisional debit in the Running Bond Account is converted into actual debit. If the goods received under ARE-3 are to be exported, an application for export in ARE-1 is to be prepared and submitted to the Customs Authority for endorsement. The Running Bond Account will be credited by an amount equivalent to the duty for the goods mentioned in ARE-1. If the goods are cleared for home consumption, the exporter pays the duty with interest from the date of clearance from the factory and credits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the Bihar Unit that is responsible for export or payment of duty if diverted to home consumption. In fact, Indian Oil Corporation Ltd admittedly reports the export in the GST returns of his Bihar Unit and not in the ones for the West Bengal Unit. If it were to be treated as export of the West Bengal Unit, export reported would have widely varied with the actual export measured on the basis of PDOs and lifting from the supply point at Raxaul. Clearly, the transportation from Haldia to the export warehouse at Raxaul is no measure of actual export. The Applicant himself is well aware of the anomaly and has not reported in his returns the transaction as export under section 5 of the CST Act either. Apparently, the Applicant s arguments are at variance with what he and the Bihar Unit have reported in their returns under both the CST Act and the GST Act. 19. The Applicant refers to a few judgments in support of his argument, which are discussed below. In Nipha Export Pvt Ltd (8 VST 466), pursuant to an export order received at the Head Office in Kolkata, the branch office purchased goods in Haryana and sent them to Kolkata, which exported the goods outside the territo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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