New Delhi, Jul 22 : No IGST would be levied on goods that are taken out of India on consignment basis for exhibition or other export promotion events, the Government clarified on Monday.
''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 this time,'' the Central Board of Indirect Taxes and Customs (CBIC) said in a statement here.
Earlier, several goods, including gems and jewellery, which were being carried outside of the country even for exhibition or consignment purpose was attracting IGST at re-import. Over this, trade and industry have urged the Finance Ministry to exempt IGST on goods that are carried for exhibition purpose.
The CBIC said the movement of these goods out of India should be accompanied by a delivery challan issued in accordance with the provisions contained in rule 55 of the CGST Rules. The Department said, ''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, as required under section 16 of the IGST Act, is not required.''
But the CBIC has clarified that these are required to be either sold or brought back to India within a period of six months from the date of removal. And if the goods neither sold nor brought back in the six months time-frame, the supply would be deemed to have taken place, the CBIC said, adding that in this case, the sender shall issue a tax invoice on the date of expiry of six months from the date of removal on the residue goods.
The benefit of zero-rating, including refund, shall not be available in respect of such supplies, it added. The Department said if the specified goods are sold abroad, fully or partially, within six months, the supply shall be held to have been effected, in respect of the quantity so sold, on the date of such sale. In this case, the sender shall issue a tax invoice in respect of such quantity of goods which has been sold.
hese supplies shall become zero-rated supplies at the time of issuance of invoice. However, refund in relation to such supplies shall be available only as refund of unutilized ITC and not as refund of IGST. The CBIC said no tax invoice is required to be issued in respect of goods which are brought back to India within the period of six months.
Gems and jewellery industry has welcomed the decision with Mr Pramod Kumar Agrawal, Chairman, The Gem and Jewellery Export Promotion Council (GJEPC) saying, ''The entire gem & jewellery industry is thankful to the Govt. for coming up with this trade friendly step as this will further boost the promotional activities globally. As the apex body of the industry, while making representations we have not left any stone unturned in our genuine effort towards resolving this issue. The move will definitely provide respite to our member exporters.” (UNI)