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Domestic Purchase, Domestic Supply for Foreign Order

Rajarajan (AO) (272 Points)

30 January 2020

Dear All,

We have got an USD valued purchase order from overseas customer. The foreign customer has obtained a order from India PSU and asks us to supply materials locally to India PSU.

As per Purchase Order we have to manufacture a steel stack and supply to a PSU in India. So strictly speaking it is domestic supply for us but we have raise invoice on foreign customer in USD. I have an LUT

How to go about

1. How to purchase Raw Materials

2 Whether it is an Export? if so can it be at 0% GST since I have LUT

3 What will be the supply type in E Way bill

4. Whether the goods should move with Export Invoice also?

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3 Replies

Roshni (Studwnt) (1141 Points)
Replied 30 January 2020

Place of supply is outside India. therefore it is export. yes goods to be moved with invoice

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Anup Agarwal (1184 Points)
Replied 30 January 2020

Accordingly to section 10(1)(b) of IGST Act 2017 it is bill to ship to model of supply of goods in the case stated by you.

1. you can purchase your raw material in your general business terms.
2. As in your case you are supplying goods on the direction of a person who is outside India, export shall be there.
3. Into E-way bill you will have to fill bill to and ship to addresses.
4. Yes, As per section 2 and section 10 of IGST Act it shall be considered as Export.

Rajarajan (AO) (272 Points)
Replied 31 January 2020

Hi Anup,

Then can I raise an USD export invoice with Bill To Ship To model and send it along with eWay Bill and original to Buyer?

In eWay bill portal I will choose as under

Supply Type --> Outward

Sub Type -->Export

Transaction Type--> Bill To - Ship To by choosing this Bill To item is as under is it OK

At time of inward remittance Bank will ask the following docs.

1. PO (I have)

2. Invoice (I have)

3 Bill of Ladding and other Shipping Docs ( I dont have)

The remittance will not get credited to my account without above docs. Even if it is credited later it will get reflected in EDPMS portal and how to knock off this entry in EDPMS without export docs.

PL CLARIFY