Export FOC sales
Mukesh babu (No) (105 Points)
05 October 2020
whether export FOC sales needs to be considered for ITC reversal?
Mukesh babu (No) (105 Points)
05 October 2020
CA Akshay Hiregange
(Partner - Audit & Assistance)
(4515 Points)
Replied 05 October 2020
Where FOC exports are to unrelated party then it would not be a supply under GST, although is an export of goods as the goods move outside India.
Where FOC exports is to related party it would be covered under Sch 1 Clause 2 therefore, covering under section 16 IGST Act - zero rated supply.
Where the export is in relation to samples - then ITC can disputed although samples under Section 17(5)(h) can be read to be purchased goods - inputs and not finished goods.
Therefore, ITC reversal can be said as not required. Where value is high suggest you to obtain a legal opinion.
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