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PJ/Case Law/2018-2019/3509

Whether the applicant has to take separate registration in the state of West Bengal for raising the invoice from Mumbai head office for imports received at Haldia Port Kolkata?

Case:  SONKAMAL ENTERPRISES PVT. LTD.

Citation:  2019 (20) G.S.T.L. 498 (A.A.R. - GST)

Issue:   Whether the applicant has to take separate registration in the state of West Bengal for raising the invoice from Mumbai head office for imports received at Haldia Port Kolkata?

Brief facts:   The applicant, an importer of chemicals is a company having its Head office at Mumbai and a Branch in Gujarat - Gandhidham, both the offices being registered under the GST Laws. They want to import the Chemicals at Haldia Port (Kolkata, West Bengal) on their own and sold such goods to customers in West Bengal and charge IGST by raising bills/invoices from Mumbai H.O. and the said goods will be stored at the rented Customs Bonded warehouse at Haldia Port. They neither have any establishment nor any place of operation in the State of West Bengal. The terms of delivery will be Ex-Terminal (i.e., the ownership and its respective risks and rewards will be transferred to their customer the moment goods are cleared from the customs port).

Appellant’s contention:  The applicant will be supplying goods to their customer in West Bengal from Custom Warehouse situated at Kolkata, therefore place of supply is West Bengal as per Section 10(1)(a) of IGST Act, 2017. Since the applicant is only registered at Maharashtra and is supplying the goods using Maharashtra GSTIN number and levying IGST for this transaction, so it is an inter-State supply of goods as defined in Section 7(3) of the IGST Act, 2017. Hence, as per applicant’s opinion they are not required to have separate registration in the state of west Bengal.

Respondent’s Contention :  As per the concerned officer, the nature of supply of goods for above mentioned transaction is an Inter-State supply of goods  as defined in Section 7(2) of the IGST Act, 2017 because Section 7(2) deals with supply of goods imported into the territory of India and not Section 7(3) of the IGST Act, 2017, as claimed by the applicant, as it pertains to Supply of Services. Secondly, the place of Supply of Goods as per Section 11(a) of the IGST Act, 2017 which is for goods imported into India and the place of supply shall be the location of the importer and not Section 10(1)(a) of IGST Act, 2017, as claimed by the applicant, which is for place of supply of goods other than supply of goods imported into.

Reasoning of judgment:  There is no Pre-GST practice in this case, as transaction is to be undertaken for the 1st time at Kolkata. Further question may arise if the applicant not takes separate registration in West Bengal, can they do the transaction on Mumbai head office GSTIN if so, then in case of issuance of EWay bill is correct? First and foremost, since the applicant will be importing the goods into India as per Section 7(2) of the IGST Act, 2017, such supply of goods imported into India shall be treated as supply of goods in the course of Inter-State trade or commerce. Secondly in respect of goods imported into India, as per Section 11(a) of the IGST Act, 2017, the place of supply shall be the location of the importer and in the present case since the importer is registered in Mumbai, the place of supply shall be Mumbai, Maharashtra.

Decision:  Ruling in favour of assessee

Comment : The Gist of the case is that the applicant will be importing the goods into India as per section 7(2) of IGST Act,2017, the place of supply shall be the location of the importer and in the present case the importer is registered in Mumbai, the place of supply shall be Mumbai, Maharashtra and therefore the applicant need not to take separate registration in the state of West Bengal is required and further the applicant can do  transaction on Mumbai head office GSTIN  and can mentioned same GSTIN in E-way bill and dispatch place as Customs warehouse.

Prepared by: Meenal soni

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