The Authority for Advance Ruling (AAR), Kerala, has ruled that the goods and services tax (GST) need not be paid on ‘merchanting trade’. A decision by taking into account only some of the legal provisions.
Synthite Industries (SIL), of Ernakulum, places an order on a supplier in China for spices and asks him to ship the goods directly to their customer in thenUnited States (US). They pay the Chinese supplier against his invoices, raise their own invoices on the US customer and get payment from him. Sometimes, they ask the Chinese supplier to ship the goods to their warehouse in Netherlands
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