In re West Pharmaceutical Packaging India Private Limited (GST AAR Tamilnadu)
This ruling addresses whether West Pharmaceutical Packaging India Private Limited (the “Applicant”), a company registered in Telangana, needs to obtain GST registration in Tamil Nadu for its operations within a Free Trade Warehousing Zone (FTWZ) located in Chennai. The Applicant imports “rubber stopper” products for pharmaceutical use from overseas group companies. These goods are shipped directly to the J. Matadee Chennai Free Trade Zone, where a third-party service provider manages warehousing, storage, packaging, and customs clearances on the Applicant’s behalf. The Applicant supervises these operations from Telangana and has no physical presence or GST registration in Tamil Nadu.
The core of the Applicant’s argument rests on the interpretation of GST and Customs laws, particularly concerning the nature of transactions within an FTWZ. An FTWZ is considered a Special Economic Zone (SEZ) and is deemed to be a territory outside the customs territory of India until goods are cleared for home consumption. Therefore, when goods are imported into an FTWZ, a “Bill of Entry for Warehousing” is filed, and customs duty (including Integrated Goods and Services Tax – IGST) is not levied at this stage. The Applicant maintains that the sale of these warehoused goods to an end customer in India, before they are cleared for home consumption, falls under Schedule III of the CGST Act. Schedule III lists activities that are considered neither a supply of goods nor a supply of services under GST, meaning such transactions are not subject to IGST for the Applicant.
