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GST – Karnataka AAR - Interpretation of term “exporter” - Section 2(5) of the IGST Act, 2017 - Applicant are engaged in trading of finished goods and also in providing support services to customers located outside India - applicant intend to supply domestically procured goods to customers outside India -Whether the supply of goods from the applicant to the overseas customer is zero rated supply – HELD – in the present case, there are two transactions involving the applicant. The first transaction is of supply of goods by the manufacturer to the applicant and the second transaction is of supply of the same goods by the applicant to an overseas customer - As per the agreement with the applicant, the Indian manufacturer undertakes to supply the goods and complete all the export compliances including filing of Shipping Bill as an exporter and also receives Bill of Lading from shipper - Since the manufacturer files the shipping bill as exporter and also gets the bill of lading issued to him, he is the owner of the goods and holds the title of goods till they cross the customs frontiers of India. In effect the manufacturer takes the goods out of India to a place outside India while he is holding ownership and title of the goods, i.e., he exports the goods in terms of Section 2(5) of the IGST Act, 2017. Thus the manufacturer is the exporter of goods. Therefore in the first transaction of supply of goods by the manufacturer to the applicant, the place of supply of goods shall be the location outside India in terms of Section 11(b) of the IGST Act, 2017 - In respect of the second transaction involving the supply of the same goods by the applicant to overseas customer, the goods are supplied from a location outside India to a location outside India, i.e., the supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India. The said transaction is covered under Entry 7 of Schedule III of CGST Act, 2017 as a transaction or supply which shall be treated neither as a supply of goods nor a supply of services - The supply of goods from the applicant to the overseas customer is treated neither as supply of goods nor as supply of services – Ordered accordingly
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