CBIC has issued Circular No. 184/16/2022-GST dated 27th December, 2022. This circular is based on entitlement of ITC on service of transport of goods outside India including by mail or courier. Here both service provider and service receiver are located in India.
Service provider– person providing service of transportation of goods
Service receiver– person who wants to transport his goods
PLACE OF SUPPLY :
Where goods are transported within India
Service receiver is:
- Registered under GST -location of such registered person
- Not registered under GST -location where service receiver handovers the goods to service provider for transportation
Where goods are transported outside India
Whether service receiver is registered or not – place of supply will be place of foreign destination of such goods.
ISSUE INVOLVED :
In case of service of transportation of goods to a place outside India, supply place will be foreign destination place of these goods and not the state in which service receiver is registered. The doubt would be whether ITC is available of such service to the service receiver who is located in India.
TYPE OF SUPPLY AND TAX APPLICABLE :
As the place of supply will be place of foreign destination of such goods it will be interstate supply and IGST will be applicable on such service.
ELIGIBILITY OF INPUT TAX CREDIT :
Section 16 of CGST Act provides the eligibility along with conditions to avail ITC and Section 17 of CGST Act provides for apportionment of credit and restricted credit. These provisions do not indicate that ITC will not be available to the service receiver if supply place of transportation service is a foreign destination.
Hence, if all the conditions of availing ITC of Section 16 and Section 17 are fulfilled then service receiver will be eligible to avail input credit of this service.
STATE CODE APPLICABLE :
When reporting the supply of such service in GSTR-1 applicable state code is “96-Foreign Country”.
Disclaimer
The information provided in this presentation does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This presentation is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi-judicial authorities may not take a position contrary to the views mentioned herein.
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