Goods Sent Out of India For Exhibition (For Export Promotion) 2024

Introduction

Goods Sent Out of India For Exhibition (For Export Promotion) 2024

Many goods are sent out of India for exhibitions on export events on a trial basis. They are only sold if approved by customers abroad. If not sold, they are brought back to India. This happens often in sectors like gems and jewellery where Goods are Sent for Export Promotion in International Trade Fair. In instances where ambiguity exists regarding the export procedure, the Central Board of Indirect Taxes and Customs (CBIC) has provided clarification.

Whether the dispatch of goods constitute a supply?

For qualify the Supply definition it must satisfy two test i.e. (Section 7 of CGST Act, 2017)

• It Should be for a consideration by a person
• It should be in the course or furtherance of business

Whether sending goods outside India for exhibition qualify as zero-rated supply (ZRS) ?

Zero Rated Supply means any of the following Supply (Section 16 of IGST Act, 2017)

• Export of Goods or Services or both
• Supply of Goods or Services or both to SEZ Unit or SEZ Developer Therefore Such Supplies which are export or are Supply to SEZ Unit/ Developer would qualify as ZRS. Accordingly Sending of Goods Outside India for Exhibition/ Trade Fair purpose do not Constitute Supply as the said activity does not fall in the ambit of Supply definition. Since Such Activity is not a supply, the same can not be considered as Zero Rated Supply.

When does the time of supply occur for sending goods?

The stipulated timeframe for exporting goods from India is six months, with the expectation that they will be repatriated within this duration. For Time of Supply this can be categorized into two parts
❖ Neither Sold Abroad Nor Brought back within six months Supply deemed after six months from removal
❖ Sold Abroad If the goods are sold overseas, either completely or partly, within the specified six-month period, the transaction is considered complete for the portion of goods sold on the date of sale.

What documentation is essential for Sending the specified goods out of India?

The said activity is in the nature of “sale on approval basis” wherein the goods are sent / taken outside India for the approval of the person located abroad and it is only when the said goods are approved that the actual supply from the exporter located in India to the importer located abroad takes place. The Sending Goods shall be accompanied by Delivery Challan and Eway Bill if applicable. Supply shall not be treated as ZRS i.e. Zero Rated Supply while sending goods outside india in this case. (Please refer Circular No. 108/27/2019-GST)

Is an invoice required to be issued when specified goods sent out of India are not brought back within the stipulated period?

Certainly, we can categorize it into two parts
Neither Sold Abroad Nor Brought back within six months

The sender shall issue a tax invoice on the date of expiry of six months from the date of removal, in respect of such quantity of specified goods which have neither been sold nor brought back

Sold Abroad

The sender shall issue a Tax invoice in respect of such quantity of goods which has been sold abroad

What documentation is essential for Sending the specified goods out of India?

The said activity is in the nature of “sale on approval basis” wherein the goods are sent / taken outside India for the approval of the person located abroad and it is only when the said goods are approved that the actual supply from the exporter located in India to the importer located abroad takes place. The Sending Goods shall be accompanied by Delivery Challan and Eway Bill if applicable. Supply shall not be treated as ZRS i.e. Zero Rated Supply while sending goods outside india in this case. (Please refer Circular No. 108/27/2019-GST)

Is an invoice required to be issued when specified goods sent out of India are not brought back within the stipulated period?

Certainly, we can categorize it into two parts

Neither Sold Abroad Nor Brought back within six months
The sender shall issue a tax invoice on the date of expiry of six months from the date of removal, in respect of such quantity of specified goods which have neither been sold nor brought back
Sold Abroad
The sender shall issue a Tax invoice in respect of such quantity of goods which has been sold abroad

What Records to be maintained by Registered person for Sending Goods out of India

The Registered person dealing in specified goods shall maintain a record of such goods as per the format given below

Whether Refund Claims permissible for specified goods exported from India but not repatriated ?

The activity of sending / taking specified goods out of India is not a zero-rated supply. That being the case, the sender of goods cannot prefer any refund claim when the specified goods are sent / taken out of India. It is clarified by the CBIC accordingly that the sender can prefer refund claim even when the specified goods were sent / taken out of India without execution of a bond or LUT, if he is otherwise eligible for refund as per the provisions contained in sub-section (3) of section 54 the CGST Act read with sub-rule (4) of rule 89 of the CGST Rules, in respect of zero rated supply of goods after he has issued the tax invoice in case where sold abroad or not taken back into india as the case may be. It is further clarified that refund claim cannot be preferred under Rule 96 of CGST Rules i.e. WITH PAYMENT OF IGST OPTION as supply is taking place at a time after the goods have already been sent / taken out of India earlier.

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