Export of Goods, as Defined in IGST Act, is Not Export Supply of Goods

  • August 2, 2019
  • CA Chandan Agarwal's Office
Chandan Agarwal - GST Import Export

Chandan Agarwal – GST Import Export

Clause (5) of section 2 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the IGST Act) defines the expression “export of goods” as follows:-

“(5) “export of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India;”

This definition of expression “export of goods” represents activity of “taking goods out of India to a place outside India”. In this definition, activity of supply is missing. In the Constitution of India, for an export supply of goods or services or both, expression “supply of goods, or of services or both in the course of import of the goods or services or both into, or export of the goods or services or both out of, the territory of India” has been used.

The definition of expression “export of goods”, provided in clause (5) of the IGST Act, may be useful for the purpose of the Customs Act but it cannot be used for the purpose of the IGST Act. In the expression “supply of goods, or of services or both in the course of import of the goods or services or both into, or export of the goods or services or both out of, the territory of India “, activity of supply and activity of export are so integrally connected that they cannot be dissociated.

Definition of expression “export of goods”, provided in clause (5) of section 2 of the IGST Act, has been used in clause (a) of sub-section (1) of section 16 of the IGST Act. There, the said expression, “export of goods” has been treated a supply of goods, which is wrong. Second thing is that in the Constitution, in the expression “supply of goods or services or both in the course of export of the goods or services or both out of the territory of India” words “out of the territory of India” have been used whereas the definition of expression “export of goods”, words “out of India” have been used.

To have more information on sale or supply of goods in the course of export of the goods out of the territory of India, I will like to advise learned readers of this article to read my other article published on this website with title ‘Expression “In the Course of” in GST Laws’.

Source: https://taxguru.in/goods-and-service-tax/export-goods-defined-igst-act-export-supply-goods.html

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