With reference to goods sent out of India by HCP Limited for exhibition, you are required to answer the following with explanation of relevant…

CA Final · Integrated Business Solutions (Multidisciplinary Case Study) · PYQS · November 2024
With reference to goods sent out of India by HCP Limited for exhibition, you are required to answer the following with explanation of relevant provision of CGST Act/rules : (i) When is the supply of goods sent outside India said to take place? Whether invoice is required to be issued by HCP Limited in respect of goods not brought back? (ii) Whether refund can be preferred by HCP Limited in respect of goods sent outside India but not brought back?

Suggested Answer and Working Notes:

(i) The activity of sending specified goods out of India for exhibition is not a supply, but is in the nature of "sale on approval basis". The specified goods sent out of India are required to be either sold or brought back within the stipulated period of 6 months from the date of removal. Therefore, the supply of the 200 units which were neither sold abroad nor brought back within 6 months from the date of removal is deemed to have taken place on the expiry of said 6 months, i.e. on 01.03.2024. Invoice in respect of said 200 units will be issued on expiry of 6 months from the date of removal, i.e. on 01.03.2024. (ii) HCP Limited may claim refund of accumulated input tax credit in accordance with the provisions contained in section 54 (3) of the CGST Act, 2017 read with rule 89 (4) of the CGST Rules, 2017 in respect of zero-rated supply of 200 units after he has issued the tax invoice on the date specified above.
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