Goods sent/taken out of India for exhibition or on consignment basis

Goods sent/taken out of India for exhibition or on consignment basis

Referred To Circular No. 108

1. The activity of sending / taking the goods out of India for exhibition or on consignment basis for export promotion, except when such activity satisfy the tests laid down in Schedule I of the CGST Act, do not constitute supply as it does not fall within the scope of section 7 of the CGST Act as there is no consideration at that point in time. 

2. Since such activity is not a supply, the same cannot be considered as “Zero rated supply” as per the provisions contained in section 16 of the IGST Act. 

Whether any records are required to be maintained by registered person for sending / taking specified goods out of India?

The registered person dealing in specified goods shall maintain a record of such goods as per the format at Annexure to this Circular No. 108/27/2019-GST.

Documentation required for sending / taking the specified goods(for exhibition or on consignment basis) out of India

1. The said activity is in the nature of “sale on approval basis”

2. The specified goods shall be accompanied with a delivery challan issued in accordance with the provisions contained in rule 55 of the CGST Rules. 

3. The activity of sending / taking specified goods out of India is not a zero-rated That being the case, execution of a bond or LUT, as required under section 16 of the IGST Act, is not required.

When is the supply of specified goods sent / taken out of India said to take place?

1. The specified goods sent / taken out of India are required to be either sold or brought back within the stipulated period of six months from the date of removal as per the provisions contained in section 31(7) of the CGST Act.

2. The supply would be deemed to have taken place, on the expiry of six months from the date of removal, if the specified goods are neither sold abroad nor brought back within the said period.

3. If the specified goods are sold abroad, fully or partially, within the specified period of six months, the supply is effected, in respect of quantity so sold, on the date of such sale. 

Whether invoice is required to be issued when the specified goods sent / taken out of India are not brought back, either fully or partially, within the stipulated period?

1. When the specified goods sent / taken out of India have been sold fully or partially, within the stipulated period of six months, a tax invoice shall be issued in accordance with the provisions contained in section 12 and section 31 of the CGST Act read with rule 46 of the CGST Rules. 

2. When the specified goods have neither been sold nor brought back, either fully or partially, a tax invoice shall be issued on the date of expiry of six months from the date of removal.

Whether the refund claims can be preferred in respect of specified goods sent / taken out of India but not brought back?

1. The sender of goods cannot prefer any refund claim when the specified goods are sent / taken out of India.

2. The sender can prefer refund claim even when the specified goods were sent / taken out of India without execution of a bond or LUT, if he is otherwise eligible for refund as per the provisions contained in section 54(3) the CGST Act read with rule 89(4) of the CGST Rules, in respect of zero rated supply of goods after he has issued the tax It is further clarified that refund claim cannot be preferred under rule 96 of CGST Rules as supply is taking place at a time after the goods have already been sent / taken out of India earlier.

 

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