In this article we are going to discuss about the inserted two provision in GST in Schedule III of CGST Act which comprises the negative list under GST ie treated as NON-GST supply. Prior to this, there was very much ambiguity in law in respect of below mentioned transaction that whether it will treated as exempt supply or not, if it will be treated as exempt supply then reversal of ITC arises, if person supply taxable as well as exempt supply and accordingly rule 42 (Input or Input services) or rule 43(capital goods) have to applied. But now these ambiguity in law have been away with and the following two entries have been included in Schedule III:-

1. Warehouse Supply of Goods

2. High Sea Supply of Goods

Moving further in this article in above respect we will discuss the followings: –

1. Definition in simple words

2. Chargeability

3. Treatment of ITC if any relates to above supplies

4. Document to be issued under GST

5. Provision relates in respect of filing of GST Return

Definition in Simple Words

Warehouse Supply: – When an Importer files Bill of entry for warehousing of the goods and supply the goods from warehouse itself without clearing from home consumption, then the same is called warehouse supply.

High Sea Supply of Goods :- When goods moved from originating port to be imported into india but before entering into India, consignee of the goods supply to another person by endorsement of document of title, then the same is called High sea supply.

There are two points that requires more attention is

1. Goods

2. Supply

Goods has very broad meaning in GST as well as supply includes sales, transfer, exchange, barter, lease, rental, disposal. So if a person enter into any of the form then the same will be treated as supply and applicable provision of GST in respect will be applied thereto.


Even though the nature of the goods is taxable but if that falls within the nature of above two transactions ie warehouse supply or high sea supply then same has been covered under schedule III of GST which includes negative list. In other words, these are Non-GST supply and in these transaction no GST will be levied or charged accordingly.

Treatment of ITC

As these are covered now under NON GST supply, therefore if any input or input services has been utilized for making above supplies and ITC has been well availed (eg. Services of Custom House Agent, Services of Clearing and Forwarding Agent etc.) then there is No need to make any reversal of ITC in any manner either in full of proportionately.

Documents to be issued

 Bill of supply will suffice the requirement for making supply in above two transactions.

Provision relates in respect of filing of GST Return

To disclose the transaction of outward supply in respect of above under GST return, one should mention the details at following places: –

GSTR-1 : – TABLE 8A, 8B, 8C, 8D – Nil Rated Supplies

GSTR 3B : – TABLE 3.1 ( e ) Non GST Outward supplies

I have tried to compile the provision at one place in this article ,  even apart from that left anything then do let me know.

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Qualification: Student - CA/CS/CMA
Company: NLMK India Service Center Pvt Ltd
Location: SOUTH DELHI, New Delhi, IN
Member Since: 03 Feb 2020 | Total Posts: 4

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February 2021