In re HP India Sales Private Limited (GST AAR Tamilnadu)
Applicant proposed to supply frozen chicken contained in a wholesale bag of 30kgs containing 15 small packs of 2 kg each to institutional customers or to a distributor who would further supply to institutional customers or to non-institutional customer
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
M/s. HP Sales Private Limited, A11, Echoor and Mettupalayam Village, Aarush Logistics Part Pvt. Ltd, Vallam Panruti, Echoor, Tamil Nadu, Kancheepuram, 631604 (herein after referred to as The Applicant’), are registered with GST and hold GSTIN 33AAACC9862F1ZP. The Applicant is engaged in the import and sale of IT products primarily personal computers(i.e. desktops and laptops) and printers in India.
2.1 The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017.
2.2 The Applicant is proposing to import goods into FTWZ located in Chennai from HP Singapore Pte. Ltd(hereinafter referred to as HP Singapore) or procure from domestic supplier and store the same at FTWZ facilities located at Chennai provided by the Logistic Service Provider(LSP) after filing ‘Bill of Entry for warehousing i.e. into-Bond bill of Entry disclosing the GSTIN obtained by the Applicant for their office in Chennai, Tamil Nadu. Subsequently, the Applicant would sell the said goods stored in the FTWZ facilities to the Reseller located in Bangladesh, Sri Lanka or India(located within a FTWZ), as the case may be under Bill to Reseller and ship to LSP, FTWZ as designated by the Reseller. The Applicant would raise the commercial invoice for sale of goods under the above arrangements to the Reseller and the Reseller would take the delivery of such goods in the same LSP FTWZ where Applicant’s goods are stored or different LST FTWZ.
2.3. In their interpretation of law/ facts in respect of the questions raised, the Applicant submitted that —
> FTWZ is a special category of Special Economic Zone(SEZ) as per Section 2(za) read with Section 2(n) of the SEZ Act and set-up mainly for carrying out trading and warehousing related activities
> Section 26 of the SEZ Act, 2005 provides exemption from payment of customs duty on the goods imported into the SEZ unit. Rule 30 of the SEZ Rules, 2006 permits sale/procurement of goods from warehouse to another SEZ unit or from one SEZ unit to another without payment of duty.
> In case of goods imported by the Applicant and stored at the FTWZ facilities by filing into-bond BOE, the levy of customs duty would stand deferred till clearance of such goods to the DTA customers on account of sale or otherwise of the said goods
> In the present case, the goods stored in FTWZ are supplied to the Resellers located in Bangladesh, Sri Lanka or India(located within a FTWZ), as the case may be, with ship designated as LSP FTWZ. Therefore, the subject transaction between the Applicant and the Reseller is with respect to goods before the final clearance for home consumption and shall not be subject to levy of IGST in the hands of the Applicant.
> In terms of Entry 8(a) to the Schedule III of the CGST Act, 2017, effective from 01.02.2019. ‘Supply of warehoused goods to any person before clearance for home consumption’ shall not qualify as a supply of goods nor supply of services; Therefore, supply of goods from FTWZ to the Resellers as the same would get covered within the ambit of the said entry to the Schedule III.
> Reliance is placed on the clarifications given by the Government of India, Ministry of Finance vide Circular NO.3/1/2018-IGST dated 25.05.2018, wherein it was clarified that IGST would be levied and collected only at the time of final clearance of warehoused goods for home consumption.
> Reliance is place on the ruling issued by TN AAR in the following cases with similar facts:
