Ex-factory or ex-works sale \u2013 Can it be treated as intra-State supply?
Query (Issue) Started By: – DK AGGARWAL Dated:- 30-6-2017 Last Reply Date:- 1-7-2017 Goods and Services Tax – GST
Got 4 Replies
GST
Dear Sir
\nPlease clarify as under
\nEx-factory or ex-works sale – Can it be treated as intra-State supply?
\nNow the provisions are to be analyzed to test a transaction which is popularly known as an ex-factory or ex-works sale of goods. Typically, in such transactions the supplier is responsible for making goods available at its factory site, the title, risk and possession of the goods are transferred by the supplier to the recipient at the supplier's factory gate, where after the recipient is responsible for transportation of goods up to the destination, bears the risk of any loss in transit and is free to dispose the goods in any manner it deems fit. Further, the address in the 'bill to' field of the invoice raised by the seller would be the recipient's location, where t<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n same position of control over the goods which the supplier himself had immediately before such delivery. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he solution? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n pears that it is flaw in the law. You have read between the lines. I want to express my hunch as under:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Ex-factory or ex-works sale \u2013 Can it be treated as intra-State supply? Query (Issue) Started By: – DK AGGARWAL Dated:- 30-6-2017 Last Reply Date:- 1-7-2017 Goods and Services Tax – GSTGot 4 RepliesGSTDear Sir Please clarify as under Ex-factory or ex-works sale – Can it be treated as intra-State supply? Now the provisions are to … Continue reading “Ex-factory or ex-works sale \u2013 Can it be treated as intra-State supply?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-4271","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/4271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4271"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/4271\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\nThus, in this example it can undoubtedly be said that the delivery takes place at the factory of the supplier. Now by application of Section 7(4) of the Model IGST Act, the place of supply of goods would be the factory site of the supplier. Interestingly, for the purposes of Section 7(2), termination of movement for delivery would also be the factory gate of the supplier resulting in the place of supply again being the factory site of the supplier. Thus, irrespective of the provision applied, in case of an ex-factory transaction the place of supply would be the supplier's factory, which being the same as the location of the supplier will make the transaction an intra-State supply of goods.
\nHowever, this interpretation of the provisions may result in various complications and contradictions. Firstly, if an ex-factory transaction is treated as an intra-State supply subject to levy o<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nIn view of the above, one may take a view that it is the location of goods at the time of ultimate termination of movement by the recipient himself that would be relevant for determining the place of supply. However, it is not for the supplier to be sure of whether and where the recipient chooses to move the goods as the recipient is free to move or dispose the goods in any manner in transit itself. This will result in taxability of transaction in the hands of the supplier contingent upon events not under its control. In order to avoid such uncertainties, the buyer's 'bill to'\/ 'ship to' address can be assumed to be the place where the movement of goods will eventually terminate after making necessary modifications in the agreement curtailing the buyer's right of diversion. If the address of the recipient is outside the supplier's State, then the transaction will be deemed to be an inter-State supply irrespective of the terms of supply.
\nThis view, though meritorious on a<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n "Whatever intricacies of GST law may convey, intention of Govt. is not to break GST Chain in the interest of revenue. GST being a new levy, so many teething problems may arise which may lead to litigation.
\n Anyhow Govt. may amend the law, if it breaks GST chain.
\nReply By KASTURI SETHI:
\nThe Reply:
\nDear Sir,
\n On a second thought, a sale invoice bearing the words, 'Billed to', 'Consigned to' 'Addressed to' would suffice to pave the way for litigation.
\n We cannot forget that Govt. has nothing at stake whereas the assessee has ponder over hundred times before taking the risk of litigation.
\nReply By KASTURI SETHI:
\nThe Reply:
\nPl. read 'to ponder over'.
\nReply By Ganeshan Kalyani:
\nThe Reply:
\nI totally agree with the concern of the querist. As expressed by Sri Kasturi Sir to determine the place of supply under GST is a tough task especially und<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n