we are getting order from overseas buyer , but buyer instructed to send goods to third party in india. payment only buyer will pay. how to raise invoice, E-way bill to third party and impact of GST. how to get payment through bank without export.
06 July 2024
In this scenario, where you are receiving an order from an overseas buyer who instructs you to send goods to a third party in India, and the payment is made by the overseas buyer, here’s how you can handle the invoicing, E-way bill, GST, and payment aspects:
### Invoicing:
1. **Invoice to Overseas Buyer:** - Issue an invoice to the overseas buyer for the goods sold. This invoice should reflect the terms of the sale, including the agreed price, currency, delivery terms (which specify the goods are to be delivered to a third party in India), and any other relevant details.
### E-way Bill:
2. **E-way Bill:** - Generate an E-way bill for the movement of goods from your premises to the third party’s location within India. The E-way bill should be generated in the name of the third party who will receive the goods.
### GST Implications:
3. **GST Treatment:** - Since the goods are sold to an overseas buyer and are subsequently sent to a third party within India, this transaction needs careful consideration: - **Export of Goods:** If the sale can be treated as an export (since the goods are moving out of India as per Section 7 of the IGST Act), it may be eligible for zero-rated GST. You would need to fulfill export documentation requirements and comply with GST refund procedures if applicable. - **Domestic Supply:** If the transaction doesn’t qualify as an export under GST law, it would be treated as a domestic supply. IGST would be applicable, and you would need to charge IGST on your invoice to the overseas buyer. The third party in India can claim credit for this IGST, subject to GST rules.
### Payment Handling:
4. **Payment Collection:** - Since the payment is made by the overseas buyer, ensure that the invoice issued to them specifies the terms of payment and currency. You can receive payment through international banking channels, such as wire transfer (SWIFT), which is commonly used for such transactions.
5. **Banking Procedures:** - To receive payment, provide your overseas buyer with your bank account details for international transfers. Ensure that all necessary details (like SWIFT code, IBAN number if applicable, etc.) are provided correctly to facilitate smooth payment processing.
### Documentation and Compliance:
6. **Documentation:** - Maintain proper documentation of the transaction, including the export invoice, E-way bill, proof of export (if applicable), and any other relevant paperwork as required by GST and customs authorities.
7. **Compliance Check:** - Consult with a GST expert or a tax consultant to ensure compliance with GST regulations and to determine the correct GST treatment based on the specifics of your transaction.
By following these steps, you can effectively handle the transaction involving an overseas buyer and a third-party recipient in India while managing GST implications and payment processing in compliance with relevant regulations.
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