Author: Khushi J Prajapati
The Tamil Nadu Authority for Advance Ruling (AAR) ruled that the transfer of title of goods by Panasonic to its customers in DTA is not a supply under the GST regime.
The AAR has ruled that transactions involving goods stored in an FTWZ, including those made within an FTWZ or transferred to a DTA, are not covered under para 8(a) of Schedule III of the CGST Act.
It was clarified by the ruling that these transactions remain outside Indian taxable territory until the goods are released for home consumption. Therefore, IGST shall apply only at the time of final clearance from FTWZ to domestic consumption and not during transfers within or outside FTWZ.
Furthermore, no reversal of ITC is needed under section 17(3) of the CGST Act for these types of transactions because they do not constitute supply under amended schedule III. This ruling strengthens that GST applies only when goods are meant for domestic consumption thereby no need to reverse ITC on transfers involving goods stored in FTWZ.
Facts
Panasonic Life Solutions India Private Limited sought clarification from the Tamil Nadu AAR on the GST repercussions of exchanges of goods that are kept in a Free Trade Warehousing Zone (FTWZ).
The applicant mainly asked three questions such as: if the movement of items from the FTWZ to the Domestic Tariff Area (DTA) or a series of passages within the FTWZ be liable for GST under para 8(a) of Schedule III of the CGST Act; whether Integrated Goods and Services Tax (IGST) would be charged when goods leave from FTWZ to DTA; and does it need any reversal of Input Tax Credit (ITC) if there are goods excluded from para 8(a) schedule III.
Case Details
Case Name – Panasonic Life Solutions India Pvt Ltd
Court – Authority For Advance Ruling (AAR) Tamil Nadu
Case Number – 17/ARA/2024
Date of Judgement – 25/07/2024