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Goods delivered to India from India. But payment made by overseas

21 July 2022

I have a question for GST apply for my services to foreign customer. I manufacturing a goods and supply to Indian companies as advised by foreign customer. The payment made by foreign customer.

That means goods delivered to India from India. But payment made by overseas.

Is this service comes under GST? If yes what is the GST rate? How to make Invoice without the recipients GST number?

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CA. ANKIT PANDYA (CA) (682 Points)
Replied 22 July 2022

This transaction will not fall under the definition of Export of goods. As per section 2(5) of IGST act "(5) ―export of goods with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India;"

Now refer Place of supply rules - Section 10 (1) (a)

(1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,––
(a) where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;"

So in your case, GST will be applicable since it is not export and place of supply is the place where movement of goods terminates for delivery to the recipient.

Invoice will be billed to overseas Party (unregistered person) and ship to Indian recipient. Report the sales in GSTR-1 and 3B as domestic sales to Unregistered person and pay GST.

please also check with your bank as they might ask for additional documents and clarification at the time of receipt of foreign currency in your account.