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Source: smetimes.in
News
Govt clarification on exhibition related export goods
By http://www.smetimes.in, 23 Jul. 2019

The Finance Ministry on Monday gave clarification related to goods that are taken out of India on a consignment basis for exhibitions or other export promotion events.

These goods are sold only when approved by the prospective customers abroad. The unsold goods are then brought back to India. Exporters of these items were facing problems due to the lack of clarity on the procedure to be followed under GST at the time of taking these goods out of India and at the time of their subsequent sale or return to India. Taking cognizance of these problems and in order to help exporters, the Central Board of Indirect Taxes and Customs (CBIC) has now issued a comprehensive clarification in this regard said an official release

 

 

The key points clarified in the Circular include, that the activity of taking goods out of India on a consignment basis for the exhibition would not in itself constitute a supply under GST since there is no consideration received at this time.

In addition, the movement of these goods out of India shall be accompanied by a delivery challan issued in accordance with the provisions contained in rule 55 of the CGST Rules.

 

 

Since taking such goods out of India is not a supply, it necessarily follows that it is also not a zero-rated supply. Therefore, the execution of a bond or LUT, as required under section 16 of the IGST Act, is not required.

The goods taken out of India in this manner are required to be either sold or brought back within a period of six months from the date of removal.

The supply would be deemed to have taken place if the goods are neither sold abroad nor brought back within the period of six months. 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 number 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 specified goods are sold abroad, fully or partially, within the period of six months, the supply shall be held to have been affected, in respect of the quantity so sold, on the date of such sale. In this case, the sender shall issue a tax invoice in respect of such quantity of goods which has been sold. These supplies shall become zero-rated supplies at the time of issuance of the invoice. However, a refund in relation to such supplies shall be available only as of the refund of unutilized ITC and not a refund of IGST.

No tax invoice is required to be issued in respect of goods that are brought back to India within the period of six months.

The circular was issued on July 18, said the Finance Ministry release.