prpri Supply outside the territory of India not taxable in GST Supply outside the territory of India not taxable in GST

Company is manufacture of die casting of Aluminum and Zinc in India and on the request of the Foreign buyer and as the drawing company manufacture die for certain years use it die for export of product to buyers. At last, foreign buyer asked to Scrap the die.

Second, the die was made in Singapore as per the specification of foreign buyer and imported in to India for making export of goods then after certain year die was scraped on the instruction of foreign buyer.

Third, die was made in Singapore as per the specification of foreign buyer and from there exported to Germany for the onward use of buyer.

Now the manufacturer of India wanted to know it is GST liability in above three conditions;

a. Whether he will be liable for GST in case of billing to foreign buyer with without movement of good i.e What will happen in the case of ITC he will bill himself.what will be liability in case die is scrapped.

b. In case of import of die from Singapore what will be his liability under GST and ITC of the same

c. In case of Die is directly being exported to Germany in foreign buyer what will be liability of India manufacturer.

In the above case, AAR was sought by the Dolphin Die Casting Pvt Ltd in Karnataka.

Discussion and facts:

1. On nature of the activity carried out by the applicant, it was observed that the applicant is a manufacturer and exporter of Aluminium and Zinc die Castings to the overseas The applicant first manufactures the die mould as per the requirements and specification given by the customer. This die retained by the applicant and used for the manufacture and supply of Aluminium and Zinc die Castings. The applicant raises the tax invoice for this die in the name of overseas customer in foreign currency for receipt of payment though the die is not physically exported to the customer.

2. Section 2(5) of the IGST Act defines the export of goods as – “export of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India; and

3. Time of supply

(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this s

(2) The time of supply of goods shall be the earlier of the following dates – namely: –

a. Date of issue of invoice by supplier or last date of on which he is required, under Section 31[1], to issue invoice with respect to supply or

b. Date on which the supplier receive the payment with respect to supply

4. Further as per sub section (1) of section 8 of the IGST Act 2017

8(1) – Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply:

5. Section 2(10) of the IGST Act defines the import of goods as – “import of goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India;

6. In case of import of die from Singapore, it is import provided the company imported in its name and has to pay IGST under reverse charge and can claim it same of ITC.


1. In the case of manufacture of Die by the applicant and invoiced to the recipient, without moving the goods, the applicant has to raise the tax invoice addressed to the foreign Since it is an intra-State supply, he has to pay the IGST pay the liability. The applicant is not eligible to claim said payment as input tax credit on the invoice raised by him as he is not the recipient. Further if the said die is scrapped at applicant’s end as per the instruction of the overseas customer without moving out of the country, while supplying the die scrap to the third party, the company has to issue intra/ interstate tax invoice depending upon the nature of the transaction and collect and pay the applicable tax as per the provisions of the GST Acts.

2. In the case of manufacture of Die by the Singapore supplier, if applicant physically imports the Die to a place in India then applicant has to pay the IGST on reverse charge mechanism and claim the IGST tax paid as input tax credit, subject to conditions

3. Further if the die belonging to the applicant is scrapped at the location of the overseas supplier without die coming to India, then such transaction is occurring outside the taxable territory, e. India and hence not under the purview of GST Act.

Disclaimer : The contents of this article are solely for information and knowledge and does not constitute any professional advice or recommendation. Author does not accept any liability for any loss or damage of any kind arising out of this information set out in the article and any action taken based thereon.

About the Author: Author is Sr. Partner of GRANDMARK & ASSOCIATES, Chartered Accountants in Gurugram [ Haryana] and Domain Head of GST Department of GMA. He can be reached at WWW.

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August 2021