Jul 22, 2019

Gems and Jewellery Carried for International Exhibitions Exempted from IGST on Reimport

In an official announcement made on July 18, the Ministry of Finance, Government of India, responding to a number of representations made by the trade and industry, has clarified that there will be no IGST applicable on reimport of gem and jewellery items taken out of the country for international exhibitions or on consignment basis for promotional purposes.

The clarification comes as a huge relief to exporters, as those who had participated in global shows, or carried goods abroad for promotional tours, were being asked to pay IGST on their return to the country with these goods.

The statement from the government clarified that that the activity of sending / taking the goods out of India for an exhibition or on consignment basis for export promotion “would not in itself constitute a supply under GST”. It added that the said activity does not fall within the scope of section 7 of the CGST Act as there is no consideration at that point in time. Since such activity is not a supply, the same cannot be considered as “Zero Rated Supply‟ as per the provisions contained in section 16 of the IGST Act.

Commenting on this development, Pramod Kumar Agrawal, Chairman, The Gem and Jewellery Export Promotion Council (GJEPC) said, “The entire gem & jewellery industry is thankful to the Government for coming up with this trade friendly step as this will further boost our promotional activities globally. As the apex body of the industry, while making representations we have not left any stone unturned in our genuine effort towards resolving this issue. The move will definitely provide respite to our member exporters.”

The Circular from the Ministry of Finance clarified, however, that the supply would be deemed to have taken place if “the goods are neither sold abroad nor brought back within the period of six months”.

The Circular stated, “If the specified goods are sold abroad, fully or partially, within the period of six months, the supply shall be held to have been effected, in respect of the quantity so sold, on the date of such sale. In this case, the sender shall issue a tax invoice in respect of such quantity of goods which has been sold”.