Welcome to your Ch 8: Zero Rated Supply Section 16 (6 to 10)
6. Examine the following statement: ABC Ltd. India has received an order for supply of services amounting to $ 5,00,000/- to a US based client. ABC Ltd. India is unable to supply the entire services from India and asks XYZ Ltd. Mexico to supply a part of the services (say 40% of the total contract value). Only 60% is realised in convertible foreign exchange and remaining 40% directly paid by the US based client to XYZ Ltd. Mexico. Entire value of $ 5,00,000 is raised by ABC Ltd. India.
(i) Transaction between ABC Ltd India and US based client is export of service only to the extent of $ 3,00,000.
(ii) Transaction between ABC Ltd India and XYZ Ltd. Mexico is not an import of service since service is supplied to XYZ Ltd.
7. M/s ABC sends 100 units of specified goods out of India on approval basis on delivery challan. The goods are sent to 3rd party and not to a distinct person. This 100 units of specified goods are neither sold nor brought back within 6 month from the date of removal.
(i) A tax invoice would be required to be issued for entire 100 units of specified goods in accordance with the provisions contained in section 12 and section 31 of the CGST Act read with rule 46 of the CGST Rules within the time period stipulated under section 31(7) of the CGST Act.
(ii) M/s ABC may claim refund of accumulated input tax credit in respect of zero-rated supply of 100 units.
8. M/s ABC sends 100 units of specified goods out of India on approval basis on delivery challan. The goods are sent to 3rd party and not to a distinct person. 10 units of specified goods are sold abroad after one month of sending / taking out and another 50 units are sold after two months of sending / taking out. Remaining 40 units are not brought back within the stipulated period of six months from the date of removal.
(i) A tax invoice would be required to be issued for entire 10 units after a month, for 50 units after 2 months and remaining 40 units after 6 months.
(ii) M/s ABC may claim refund of accumulated input tax credit in respect of zero-rated supply of only 60 units.
