In re Sanctum Trading Corporation Pvt. Ltd. (GST AAR Maharashtra)
M/s. Sanctum Trading Corporation Private Limited filed an application under Section 97 of the CGST Act, 2017 and the MGST Act, 2017 seeking an advance ruling on whether outward supplies of imported goods stored in its bonded warehouse and supplied to foreign-going merchant vessels on foreign run, Indian Navy ships, and Indian Coast Guard ships would qualify as “Export Sales (Zero-rated Supply)” under GST. A second question relating to export under LUT without payment of IGST was subsequently withdrawn by the applicant on 15.12.2021 and was not considered.
The applicant operated a bonded warehouse under the Customs Act, 1962 and supplied warehoused goods such as cosmetics, toiletries, food products, confectionery, and cigarettes to the above categories of vessels after filing Duty-Free Shipping Bills and obtaining customs approvals. The applicant contended that such supplies should be treated as exports and zero-rated supplies under GST, relying on provisions of the Customs Act, Circular No. 113/32/2019-GST dated 11.10.2019, and an Andhra Pradesh Advance Ruling.
The Authority examined the definitions of “export of goods” under Section 2(5) of the IGST Act and “India” under Section 2(56) of the CGST Act. It observed that export requires taking goods out of India to a place outside India. The recipient vessels, including foreign-going merchant vessels, Indian Navy ships, and Indian Coast Guard ships, were located within India at the time of supply, and the goods were physically transferred within Indian territory or waters. Therefore, the supplies did not satisfy the statutory requirement of export of goods.
