“Since taking such goods out of India is not a supply, it necessarily follows that it is also not a zero-rated supply.
The Finance NSE -2.36 % Ministry on Monday said entities taking goods abroad for exhibitions or other export promotion events will not have to generate tax invoice for those goods which are brought back to India within six months.
Issuing a clarification in respect of goods taken out of India for exhibition or on consignment basis for export promotion, the ministry said exporters were facing problems due to the lack of clarity on the procedure to be followed under GST at the time of taking these goods out of India and at the time of their subsequent sale or return to India.
It said that the activity of taking goods out of India on consignment basis for exhibition would not in itself constitute a supply under GST since there is no consideration received at that time, but such goods would need to be accompanied by a ‘delivery challan’.
“Since taking such goods out of India is not a supply, it necessarily follows that it is also not a zero-rated supply. Therefore, execution of a bond or LUT (Letter of Undertaking), as required under section 16 of the IGST Act, is not required,” the ministry said.
It also said goods taken out of India in this manner are required to be either sold or brought back within a period of six months from the date of removal.
It further said the supply would be deemed to have taken place if the goods are neither sold abroad nor brought back within the period of six months.
“In this case, the sender shall issue a tax invoice on the date of expiry of six months from the date of removal, in respect of the quantity of goods which have neither been sold nor brought back. The benefit of zero-rating, including refund, shall not be available in respect of such supplies,” the ministry added.
If the specified goods are sold abroad, fully or partially, within the period of six months, the supply will be held to have been effected, in respect of the quantity so sold, on the date of such sale.
In this case, the sender will issue a tax invoice in respect of such quantity of goods which has been sold. These supplies will become zero-rated supplies at the time of issuance of invoice.
The ministry further said refund in relation to such supplies shall be available only as refund of unutilised Input Tax Credit (ITC) and not as refund of Integrated GST.
“No tax invoice is required to be issued in respect of goods which are brought back to India within the period of six months,” it added.
Source : https://economictimes.indiatimes.com/news/economy/policy/no-gst-invoice-required-if-goods-taken-abroad-for-exhibition-are-brought-back-in-6-months/articleshow/70333826.cms