Vat on movement of goods

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Sanket (Querist)
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25 August 2013 Hello,
We are the into manufacturing business. We have got an order from customer based in Singapore. He requested us to dispatch the goods to his customer based in India.
Since the movement of goods is going to be in the same state, do we need to charge VAT to him?

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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25 August 2013 This is an interesting issue.Never faced earlier. Once you dispatch your products to a dealer in India,as it has not crossed the borders of India, it can not be considered as an export sale and no exemption is avilable. Also,it can not be an import for the Indian customer as it has not come from an outside country.Here the payments may be made in Singapore Rupaiah and yet it is not entitled for exemption from VAT,as per my opinion. So,vat/cst has to be charged for this transaction.This matter has been discussed and decided in the cse of Coffee Board Vs St of Karnataka in 1990.Similar problems arise for a sale in the course of export also..mjk

Sanket

Sanket (Querist)
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25 August 2013 If we ask our customer to give order on Ex-works term to us. In that case, our liability ends as soon as we remove goods from our factory.
Our customer take possession of goods and take the goods to bonded warehouse and from bonded warehouse, he transfer the ownership to his customer and ask his customer to take the goods.
Do we still need to charge VAT to our customer?

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