Goods bought and sold abroad also will be GST, AAR clarified during a decision
New Delhi If a domestic company buys any goods from a far off-market and sells it to a different foreign market, it’ll need to pay GST on this transaction. The Authority for Advance Ruling (AAR) has clarified during a decision that albeit such goods enter the Indian border or not, the vendor is subject to GST (GST) liability in India.
This decision of AAR means if the applicant will get an order from a customer based outside India and deliver the products from another location, then he will need to pay GST on this transaction. In this, the foreign vendor will invoice the applicant company of India in foreign currency and therefore the Indian company also will issue the invoice in foreign currency to its customer and take payment.
buys any goods
It will not be necessary for goods to return to India in such deals. Hearing an application filed by Sterlite Technologies, the Gujarat bench of AAR said that if an Indian company sells goods to a buyer outside India, it’ll need to pay GST.
In such cases, it doesn’t matter that the vendor didn’t ship the products to India and therefore the buyer is additionally not in India. during this case, the applicant company wanted to understand whether GST is often levied on Merchant Trade Transactions (MTT).
However, Rajat Mohan, Senior Partner, AMRG & Associates, said that there’s no GST liability on MTT worldwide and in India too. Meanwhile, in another decision, AAR has said that PPF and a bank account like Interest earned from items and loans given to family and friends also will be added while fixing the GST registration limit.
According to GST rules, if the entire revenue of an individual or business is Rs 20 lakh or more, then he has got to pay GST. The AAR said that the things during which the applicant is exempted from tax also will include those exemptions while fixing the GST limit