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TMI Blog2021 (12) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the appellant on the recipient company located in Bangladesh. (ii) The recipient customer company receives such Dairy Machinery and its spare parts directly from M/s. SPX, Poland. In other words, the goods are directly delivered from Poland to the customer located at Dhaka, on CIF basis. While undertaking this transaction, the invoices are generated parallel to each other, whereby M/s. SPX, Poland raises a set of invoices to appellant (M/s. SPX Flow Technology (India) Pvt. Ltd., India) and at the same time, the appellant company raises another set of invoice to M/s. BRAC, Bangladesh. (iii) A Purchase Order is received by the appellant from the customer of Bangladesh specifying therein their requirement in terms of components, parts etc. and quantity required. (iv) After receiving such order, the appellant would place its purchase order to the Polish supplier i.e. M/s. SPX, Poland, specifying therein details of the goods required, quantity of such goods etc. The details like name and address of the appellant's customer at Bangladesh are also notified to the Polish supplier while placing the Purchase Order. (v) Thereupon, the Polish supplier would dispatch the goods dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered under the definition of 'supplier' as mentioned in Section 2(105) of the CGST Act, 2017. It has further been held that as the appellant, who is the supplier in the instant case, is selling goods for a consideration in the course or furtherance of business and such transaction tantamount to 'supply' in terms of the definition of 'supply'. The GAAR thereafter examined the provisions of section 7 of the IGST Act, 2017 and observed that in the event that the supplier is located in India and the place of supply is outside India, such supply would be treated as Inter-state supplies. The GAAR also referred to the provisions of section 10 of the IGST Act, 2017 and observed that the goods under consideration are supplied to overseas buyers and as such the place of supply would be a place outside India; that the supplier (appellant) has declared the principal place of business within India and issues the invoices for sale of such goods, therefore the supplier is located in India and the place of supply is outside India and as such the same would be Inter-state supply in terms of the provisions of Section 7(5) of IGST Act, 2017. The GAAR held that therefore the transaction undertaken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering into India, the transactions are covered by said Entry 7 of Schedule - III. The GAAR, therefore held that no GST is leviable on such type of transactions which have taken place with effect from 01.02.2019 and onwards. 4.4 The 'GAAR', vide Advance Ruling No. GUJ/GAAR/R/102/2020 dated 14.10.2020, ruled as follows :- (i) The activity undertaken by the applicant M/s. SPX Flow Technology (India) Pvt. Ltd., Ahmedabad is covered under Entry No. 7 in Schedule 3 of the CGST Act, 2017 in respect of the transactions undertaken for the period from 01.02.2019 onwards for the reasons discussed hereinabove. (ii) Applicable IGST is payable on goods sold to customer located outside India, where goods are shipped directly from the vendor's premises (located outside India) to the customer's premises (located outside India) for such transactions effected upto 31.01.2019. However, no IGST is payable on such transactions effected from 01.02.2019 onwards, for the reasons discussed hereinabove. 5. Aggrieved by the aforesaid ruling to the extent it has been held that the appellant is liable to pay IGST on the transactions which are undertaken before 01.02.2019, the appellant has filed the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly when the supply is carried out in between the parties who are in India. The appellant has placed reliance on the decision in case of M/s. Enmarol Petroleum [2019 (20) GSTL 442]. 6.4 As regards section 7(5) of the IGST Act, 2017, the appellant has submitted that just because a transaction is in the course of inter-state trade or commerce, such transaction cannot by itself become taxable. It has been submitted that if it is considered that there are no goods within India, then there can be no movement of such goods so as to consider it as supply of goods exigible to tax. 6.5 The appellant has submitted that when the goods are not within the Indian territory, then there can be no application of the IGST Act or CGST Act inasmuch as both these statutes are applicable only to the taxable territory of India and not beyond that. They relied upon the judgement of the Hon'ble Supreme Court in the case of M/s. GVK Industries. 6.6 The appellant has further submitted that the insertion of Entry No. 7 to Schedule - III (of the CGST Act, 2017) is explanatory by nature and hence should be adopted for the prior period also. It has been submitted that the legislature has now explicitly declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carefully gone through and considered the submissions made by the appellant in the grounds of appeal, in the further written submission and at the time of personal hearing as well as Advance Ruling given by the GAAR and other materials available on record. 9.1 The main issue involved in this case is whether trading in foreign countries by the appellant (described at para 2 above), wherein the goods are supplied from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India, is leviable to Goods and Services Tax prior to 01.02.2019. 9.2 The Advance Ruling has been issued in this case by the GAAR holding that the activity undertaken by the appellant is covered under Entry No. 7 of Schedule-III of the CGST Act, 2017 in respect of the transactions undertaken for the period from 01.02.2019 onwards and applicable IGST is payable on goods sold to customer located outside India, where goods are shipped directly from the vendor's premises (located outside India) to the customer's premises (located outside India) for such transactions effected upto 31.01.2019, however, no IGST is payable on such transactions effected fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient'. In the present case, the supply involves movement from the premises of the vendor located outside India to the buyer of the appellant located outside India. Therefore, the place of supply in this case is outside India inasmuch as the movement of goods terminates for delivery at the premises of the buyer located outside India. 10.4 As per clause (24) of section 2 of the IGST Act, 2017, words and expressions used and not defined in this Act (IGST Act, 2017) but defined in the Central Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act shall have the same meaning as assigned to them in those Acts. 10.5 Section 7 of the CGST Act, 2017 defines the scope of supply. As per clause (a) of sub-section (1) of said section 7, the expression "supply" includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Amendment) Act, 2018 (No. 31 of 2018), which came into force with effect from 01.02.2019 vide Notification No. 2/2019-Central Tax dated 29.01.2019. The said Paragraph 7 reads as follows :- "7 : Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India." 11.3 It is further observed that as per sub-section (2) of section 7 of the CGST Act, 2017 activities or transactions specified in Schedule III shall be treated neither as a supply of goods nor a supply of services. 11.4 Therefore, as the transactions of the appellant, wherein the goods are supplied from a place in the non-taxable territory to another place in the nontaxable territory without such goods entering into India, are covered under Entry 7 of Schedule III of the CGST Act, 2017, it is evident that the said transactions shall be treated neither as a supply of goods nor a supply of services with effect from 01.02.2019. 11.5 We observe that various provisions of Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018), including section 32 whereby Paragraph 7 has been inserted in Schedule-III of the CGST Act, 2017, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teel Ltd. In the present case, the supplier (appellant herein) is located in India who is supplying the goods to the buyer located in non-taxable territory. Therefore, the said judgements are not applicable in the facts of the present case. 13.1 The appellant has contended that section 10 of the IGST Act, 2017 would be applicable only when the supply is carried out in between the parties who are in India. 13.2 In this regard, it is observed that section 10 of the IGST Act, 2017 is applicable for determining place of supply of goods, other than supply of goods imported into, or exported from India. Thus, the plain reading of section 10 of the IGST Act, 2017 does not support the contention of the appellant. 14. The Advance Ruling in the case of Enmarol Petroleum India Pvt. Ltd. [2019 (20) G.S.T.L. 442 (A.A.R.-GST) has been issued, inter-alia, by considering CBIC Circular No. 3/1/2018-IGST dated 25.05.2018. As the various provisions of IGST Act, 2017 and the CGST Act, 2017 discussed hereinabove in detail have not been considered in that Advance Rulings, we are not inclined to follow the said Advance Ruling. 15. In view of the foregoing, the Advance Ruling No. GUJ/GAAR/R/102/2020 d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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