Case Details: In re: Arjun Knit Wear (2026) 41 Centax 229 (A.A.R. - GST - T.N.)
Judiciary and Counsel Details
- S/Shri B. Suseel Kumar & C. Thiyagarajan, Members
Facts of the Case
The applicant, being a GST-registered manufacturer-exporter, sought an advance ruling on valuation in respect of the export of goods under DDP terms with payment of IGST. The applicant raised a question whether transaction value should include reimbursed expenses such as ocean freight, insurance, foreign import duties, delivery charges, and other costs incurred abroad until goods reach their destination. The applicant also sought a ruling on whether IGST should be paid on such expenses and whether a refund would be available if IGST is applicable. It was stated that under the DDP model, responsibility for the delivery of goods, including all costs and risks until the goods reach the buyer’s designated location, is with the applicant and that all expenses are absorbed in the cost. The matter was placed before the Authority for Advance Ruling (AAR).
AAR Held
The AAR held that the applicant does not act as a pure agent in respect of expenses incurred under DDP terms. It was observed that, as per clause (c) of section 15(2) of the CGST Act, incidental expenses, including any amount charged for anything done by the supplier at the time of or before delivery of goods, are liable to be included in the value of supply. It was held that all expenses incurred by the applicant until goods reach the buyer’s destination, including expenses of reimbursable nature, are includible in the value of taxable supply for payment of IGST on export of goods. It was further held that matters pertaining to refund are outside the purview of the authority and are not liable for admission.
