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Supply of goods which are moved from a place located outside taxable territory and are delivered at a place outside taxable territory, would not be liable to tax in India under section 7(5)(a) of IGST Act

Shanti Prime Publication Pvt. Ltd.

Authority for Advance Ruling — Ship Building Maintenance – The applicant is a supplier of paints and powder coatings. The Applicant supplies paints and coatings that are specially designed for unique conditions to the various customers. One of the major supplies by Applicant is marine paints. The applicant is involved in supplying the goods for the vessel at the time of ship building and also as consumables on board of vessel for the purpose of maintenance purpose. Applicant caters to paint and coating requirements for ships within India. The applicant sought an advance ruling as to (i) whether the supply of goods which are moved from a place located outside taxable territory and are delivered at a place outside taxable territory, would be liable to tax in India (ii) if answer to (a) is yes, whether the recipient of the goods i.e. person liable to pay consideration, be eligible to avail the input tax credit of the said goods.

Held that:- The Hon’ble Authority for Advance Ruling held the answer to both questions in negative on the ground that the goods sold in the subject transaction are non-taxable supply as no tax is leviable on them till the time of customs clearance in accordance with and compliance of Section 12 of the Customs Act, 1962 and Section 3 of the Customs Tariff act, 1975.Jotun India Pvt. Ltd., In Re.. [2018] 2 TAXLOK.COM 101 (AAR-MAHARASHTRA)