GST:
Exporter is not liable to pay GST on RCM basis if goods are exported on FOB basis: AAR
- The Applicant, an exporter of chemical products, sought an advance ruling on GST liability for export freight in Free on Board (FOB) exports.
- In FOB exports, the exporter’s responsibility ends with the export of goods, and the export freight is arranged by the overseas buyer.
- The Applicant is neither the provider nor the recipient of the export freight service, and therefore, is not liable to pay GST on a reverse charge mechanism (RCM) basis.
- From 01.10.2022, export freight services became taxable as the exemption under Notification No. 9/2017-IT (Rate) was not extended.
- From 01.10.2023, with the omission of Section 13(9) and the proviso to Section 12(8) of the IGST Act, the place of supply for such services is determined as the location of the recipient of the service.
Tamil Nadu AAR – DCW Ltd., In re [ORDER NO. 04/ARA/2024]
