Nature of Supply in case of Billing address is outside India and Ultimate Recipient is in India:

1. Export of Goods (Section 2(5) of IGST Act): Taking Goods out of India to a place outside India.

In the above case Goods are not going out of India. Therefore, it can not be treated as export of Goods.

2. Place of Supply in case goods delivered on the direction of a third person (Section 10 (1) (b) of IGST Act):

where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person.

From the above definition we can conclude that Place of Place in this case would fall outside India.

3. Nature of Tax to be charged in the above case:

As per section 7 (5) (a) of IGST Act:

Supply of goods or services or both,––

(a) when the supplier is located in India and the place of supply is outside India;

shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.


From the above-mentioned provisions this case shall not be export of goods as goods are not going out of India, but Place of Supply would fall outside India. Therefore, it needs to be treated as Inter State Supply as per section 7(5)(a). If any order receives from other country, it need to be treated as Inter state and IGST has to be charged. Mention Place of Supply as Other territory.

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Qualification: CA in Practice
Company: M S Y and Associates
Location: Hyderabad, Telangana, India
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June 2021