Page 32 - Chap24Computation of GST

2. The requirement to issue invoice, if any, when ANEH could not sell any goods at the exhibition and
brings back entire 100 units to India in February or in August:-

Ü The circular further clarified that the activity of sending/taking goods out of India for exhibition 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.

Ü As per section 31(7) of CGST Act, 2017 read with rule 55 of CGST Rules, 2017, for goods being sent or
taken on approval for sale, the invoice shall be issued before/at the time of supply or 6 months from
the date of removal, whichever is earlier.
Ü The goods taken for supply on approval basis can be moved from place of business of registered supplier

to another place within same State or to a place outside the State on a delivery challan.
Ü In view of said provisions, ANEH is not required to issue invoice at the time of taking the goods out of
India since the activity of merely sending/ taking the taxable goods out of India is not a supply. However,
the goods shall be accompanied with a delivery challan. Further,
a) If entire quantity of goods (100 units) sent to USA is not sold but brought back by ANEH in February,

i.e. within 6 months from the date of removal,
- no tax invoice is required to be issued as no supply has taken place in such a case.
b) If entire quantity of goods (100 units) sent to USA is not sold and brought back by ANEH in August,

i.e. after 6 months from the date of removal,
- a tax invoice is required to be issued for entire 100 units of taxable goods within the time period
stipulated under section 31(7) of CGST Act.

3. Requirement to issue invoice, if any, when ANEH sells 65 units of taxable goods in USA exhibition

on different dates in January and remaining 35 units are brought back on 31st January:-
Ü However, if an aggregate of 65 units of goods are sold in USA exhibition by ANEH on different dates in
January (i.e. within the stipulated period of 6 months), a tax invoice would be required to be issued for
these units, at the time of each of these sales.

Ü When the goods are sold in exhibition, actual supply from the exporter in India to the importer located
abroad takes place and this supply qualifies as export. Export of goods is a zero-rated supply in terms
of section 16(1)(a) of the IGST Act, 2017.
Ü If remaining 35 units are brought back on 31st January, i.e. within the stipulated period of 6 months

from date of removal, no tax invoice is required to be issued as no supply has taken place.

4. Examination of technical veracity of tax advisor's advice:-
Ü The tax advisor's advice is technically correct.

Ü Since the activity of sending / taking specified goods out of India is not a zero-rated supply, execution of a
bond/Letter of Undertaking (LUT), as required under section 16 of IGST Act, is not required.
Ü However, sender can prefer refund claim even when the specified goods were sent / taken out of India
without execution of a bond/LUT, if he is otherwise eligible for refund as per section 54(3) of CGST

Act, 2017 read with rule 89(4) of CGST Rules, 2017 in respect of zero-rated supply of 65 units.

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