Case Details: In re: Snag & Bag Retail Pvt. Ltd. (2026) 39 Centax 202 (A.A.R.-GST-T.N.)
Judiciary and Counsel Details
- S/Shri B. Suseel Kumar & C. Thiyagarajan, Members
Facts of the Case
The applicant, located in India, sought an advance ruling on the applicability of GST to its business model involving the procurement of goods from Spain/USA and the sale to another Indian entity. The applicant submitted that it purchased goods from overseas vendors at wholesale price and raised an invoice on an Indian entity with marginal profit. Upon receipt of consideration in INR from the Indian buyer, the applicant remitted payment in USD to the overseas vendor. The overseas vendor delivered the goods to a warehouse in the USA, where labelling was undertaken, and thereafter the goods were delivered to the Indian buyer’s Amazon warehouse in the USA for onward sale to customers in the USA. It was contended that the goods never entered India, and there was no foreign currency realization into India. The matter was accordingly placed before the authority for advance ruling (AAR).
AAR Held
The AAR held that the applicant raised an invoice on another Indian company and that under the applicant’s business model, transfer of title occurred when the invoice was raised on the Indian buyer. It was held that the transaction between the applicant and the Indian buyer constituted a ‘supply of goods’ between two persons located in the taxable territory, even though the physical movement of goods occurred outside India. The authority interpreted para 7 of schedule III to apply only to cases where the supply of goods takes place from a place in non-taxable territory to another place in non-taxable territory, and not where the supplier and recipient are both located in India. Applying section 9 read with section 22 of the CGST Act and the Tamil Nadu GST Act, the authority concluded that since the supply was between two persons in India, GST was leviable and registration and payment of tax under GST were mandatory.
