Page 86 - GSTL_16th July 2020_Vol. 38_Part 3

324 GST LAW TIMES [ Vol. 38
cated within India or outside India) on payment of applicable duties/taxes. Such
hardware is sold as per the requirement of the customer on payment of GST,
except in case of export.
3. The applicant proposed to undertake transaction and supply of
hardware, commercially known as ‘Merchant Trade Transaction’, wherein the
applicant will receive an order from the customer located outside India and as
per their instruction, Vendor would directly ship the goods to customer located
outside India. Vendor would issue invoice on applicant against which payment
would be made in foreign currency and applicant would raise invoice on cus-
tomer and would receive consideration in foreign currency. In the above transac-
tion, goods would not physically come into India, but would move from place
outside India to another place outside India.
4. The applicant has in their application dated 24-5-2018 raised the fol-
lowing issues for determination before the Authority :
(i) Whether GST is payable on goods procured from vendor located
outside India in a context where the goods so purchased are not
brought into India?
(ii) Whether GST is payable on goods sold to customer located outside
India, where goods are shipped directly from the vendor’s premises
(located outside India) to the customer’s premises?
Personal Hearing :
5. Personal hearing was held on 21-6-2018, 12-7-2018 and 5-3-2020. Shri
Nitin Shah Advocate appeared on behalf of the applicant. In their submission
dated 25-5-2018, they submitted that their company is engaged in rendition of
software development services qua wi fi service management platform, OSS/BSS
alongside packet core with flexibility of modular and pre-integrated offerings etc.
In addition they also under supply of IT hardware to their customers. They sub-
mitted that they propose to undertake ‘‘Merchant Trade Transaction’ wherein
they would receive an order from customer located outside India; back to back
order would be placed by them to supplier located outside India; goods would
be directly shipped by vendor outside India to customer located outside India;
payment would be made in foreign currency to vendor and applicant would re-
ceive foreign currency from customer. They therefore wished the Authority for
Advance Ruling to determine if any GST is payable on goods procured from
vendor outside when goods purchased are not brought into India and whether
GST would be payable on goods sold to customer located outside India.
6. On the basis of facts disclosed in the application, oral and written
submissions at the time of personal hearing and documents produced during
personal hearing, it was decided to admit the case.
7. As per Section 2(10) of the Integrated Goods and Services Tax Act,
2017, “import of goods” with its grammatical variations and cognate expressions,
means bringing goods into India from a place outside India.
8. As per sub-section (2) of Section 7 of the Integrated Goods and Ser-
vices Tax Act, 2017, supply of goods imported into the territory of India, till they
cross the customs frontiers of India, shall be treated to be a supply of goods in
the course of inter-State trade or commerce.

GST LAW TIMES  16th July 2020  86