Levy of GST— In the instant case, applicant is intending to make the following transactions—

a. Supply of imported goods to Indian customers on High Sea Sale (HSS) basis.

b. Supply of imported goods to Indian customers from Free Trade Warehousing Zone (FTWZ).

Question raised before this authority for advance ruling is as follows—

1. Whether, in the facts and circumstances of the case, supply of imported goods on High Sea sale basis or supply of goods from FTWZ facilities by the Applicant to the Indian customers would be subject to IGST?

2. In case the answer to question -1 is in the negative viz there is no liability to tax under IGST, then in that case whether input tax credit already taken will have to be reversed, to the extent of inputs, input services and capital goods used by the Applicant to the extent of the aforesaid supply dealt with in Question -1 above?

3A. Whether the issue of the invoices from the Applicant's only office located at Hyderabad, Telangana for sale of goods from the Mumbai and Chennai FTWZ facilities of the third party logistic service provider namely DHL would qualify for purpose of discharge of its obligation in terms of Sec 31 of the CGST Act, 2017 considering the fact that the Applicant does not have any other business/fixed establishment in the States where such FTWZ facilities are located?

3B. In case the answer to the Question 3 is in the negative, then whether the Applicant ought to obtain registration in the States of Maharashtra and Tamil Nadu (location of the FTWZ facilities) for sale of such goods from the FTWZ facilities belonging to the logistic service provider namely DHL?

The applicant imports goods and stores them in a FTWZ till he finds a local customer who will purchase the goods and such purchaser clears the goods under the Customs Act.

Held that— Supply of imported goods on High Sea sale basis or supply of goods from FTWZ facilities by the Applicant to the Indian customers would not be subject to IGST.

According to the explanation to section 17(3) of CGST Act inserted vide CGST (Amendment) Act 2018, w.e.f. 1-2-2019 all transactions falling under Schedule III except Entry 5 will not be considered as 'value of exempted supply for purpose of reversal of ITC of common input services. Therefore the value of the transaction referred above will not form part of value of the exempt supply.

The applicant i.e. supplier in this case is situated at Hyderabad, Telangana State whereas the goods are delivered in Other States. That is the supplier of the goods and the place of supply of goods are in two different states. Therefore it is an inter-state supply. Hence the applicant need not obtain any registration in the Other State in order to effect such inter-state transactions.