Question
We are exporting goods without GST under LUT, but now we have to export free supply to Thailand or any other country without consideration, now our query is that whether to charge GST for such free export supply or not?

Answer
Facts of the Case:
Applicability of GST on export supply without consideration.

Law Applicable:
SECTION 7 OF CGST ACT
(1) For the purposes of this Act, the expression 'supply' includes''

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or furtherance of business; and
(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.

Interpretation:
As per section 7 'supply' includes' all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. The activities made without consideration are included in definition of supply only if it is specified in Schedule I.

As export is not covered under Schedule I, therefore export without consideration is not a supply under GST. As it is not a supply under GST therefore you are not eligible for credit of inputs/input services/CG used for such export and they are required to be reversed.

Conclusion:
Export without consideration is not a supply under GST.


(Reply dt.27/06/2019)