ABOUT THE COMPANY

 Synthite Industries Limited is an Indian Non-Government Company. It's a public

company and is classified as 'company limited by shares’. It is classified as Non-
government Company and is registered at Registrar of Companies, Ernakulam.
Synthite Industries Ltd. is an Indian OLEORESINS extraction firm, supplying
ingredients to food, fragrance and flavour houses. The company is based in
KOCHI. The company was established in 1972 with 20 employees. It was founded
by C. V. JACOB who started the company after working in civil construction for
two decades. Company's authorized capital stands at Rs 2500.0 lakhs and has
4.236% paid-up capital which is Rs 105.9 lakhs. Synthite Industries Limited is
majorly in Manufacturing (Metals & Chemicals, and products thereof) business
and currently, company operations are active. Company is registered in ROC-
Ernakulam (Kerala) Registrar Office. Its CIN number is U24299KL1970PLC002294.
 Synthite is the world’s largest manufacturer and exporter of Spice Oleoresins
and Essential Oils. Synthite was among the first in India to enter into Spice
Oleoresin production. From that pioneering start in 1972, it has grown into one
of the world’s most trusted ingredient solutions provider today, with a turnover
of USD 220 million, 3000 employees, and over 35% of the global market share to
our credit. Synthite® refuses to compromise on quality, making it the preferred
choice of its clientele in over 70 countries.
They are in the business of trading in spices and spice products. They
have two modes of transactions. In the first kind, the applicant receives
order from a customer in USA for the supply of spice products. They
place a corresponding order to a supplier in China for supplying the
goods ordered by the customer in USA. The supplier in China, based on
the request of the applicant, ship the goods directly to the customer in
USA. In other words, the goods do not come to India. The Chinese
supplier issues invoice to the applicant, for which, payment will be
made by the applicant in due course. Subsequently, the applicant will
raise invoice on the customer in USA, and collect the proceeds.
BOARD OF DIRECTORS
DIRECCTORS NAME DESIGNATION

VARGHESE MUTHURAMPOYICAIL MATHAI Additional Director

JACOB CHENNAKATU VARKEY Whole time Director

VARGHESE JACOB Managing Director

AJU JACOB Whole time Director

NINAN PHILIP MODAYIL Director

GEORGE PAUL Whole time Director

MANI VARGHESE Whole time Director

AJNANA VINU Director

FACTS OF THE CASE
 The assessee received an order from a customer in USA
for the supply of spices. It placed a corresponding order
with a Chinese supplier, who shipped the goods directly
to the customer in the USA. The Chinese supplier raised
an invoice on the assessee and assessee raised the invoice
on the customer in the USA. The assessee filed an
application for advance ruling to determine if GST is
leviable on sale of goods to the USA Company, when such
goods would be shipped directly from China to the USA
without entering India.
 This is a case of ADVANCE RULING.
ADVANCE RULING
 Advance Ruling means written opinion or authoritative decision by an
Authority empowered to render it with regard to the tax consequences of
a transaction or proposed transaction or an assessment in regard thereto. It
has been defined in section 95 of CGST/SGST Law and section 12 of
UTGST as amended from time-to-time.
What is Advance Ruling?
 Any advance tax ruling is a written interpretation of tax laws. It is issued by
tax authorities to corporations and individuals who request for clarification of
certain tax matters. An advance ruling is often requested when the taxpayer is
confused and uncertain about certain provisions. Advance tax ruling is applied
for, before starting the proposed activity.
 For example, under income tax, advance ruling is available in international
taxation. This is to help non-residents ascertain the income-tax liability, plan
their income-tax in advance and avoid long drawn and costly legal disputes.
 As per GST, the advance ruling is a written decision given by the tax
authorities to an applicant on questions relating to the supply of
goods/services.
Why is advance ruling under GST
necessary?
The objective of any advance ruling, including under GST is to-
 Provide certainty for tax liability in advance in relation to a future
activity to be undertaken by the applicant
 Attract Foreign Direct Investment (FDI) – By clarifying taxation and
showing a clear picture of the future tax liability of the FDI. The
clarity and clean taxation will attract non-residents who do not want
to get involved in messy tax disputes.
 Reduce litigation and costly legal disputes
 Give decisions in a timely, transparent and inexpensive manner
When can one request for GST
Advance Ruling?
 Any taxpayer can request for advance ruling when he is uncertain of the
provisions. Advance Tax ruling is applicable on –

1. Classification of any goods and/or services under the Act.

2. Applicability of a notification which affects the rate of tax.
3. Determination of time and value of supply of goods/services.
4. Whether input tax credit paid (or deemed to be paid) will be allowed.
5. Determination of the liability to pay tax on any goods/services.
6. Whether the applicant has to be registered under GST.
7. Whether any particular thing done by the applicant regarding
goods/services will result in a supply.
Procedure on receipt of application
On receipt of an application, a copy will be forwarded to the
prescribed officer and he will furnish the necessary relevant
records.
Process of Advance Ruling under GST
An advance ruling is first sent to Authority for Advance Ruling
(Authority). Any person unhappy with the advance ruling can
appeal to the Appellate Authority for Advance Ruling (Appellate
Authority).
Decision of the Authority
The Authority can by order, either admit or reject the application.

Will all applications be allowed?

The Authority will NOT admit the application when-
(a) The same matter has already been decided in an earlier case for the
applicant
(b) The same matter is already pending in any proceedings for the applicant

Basically, Advance Ruling will not be possible in any pending case or any
decision already given.
Applications will be rejected only after giving an opportunity of being
heard. Reasons for rejection shall be given in writing.

When will the authority give their decision?

Advance ruling decision will be given within 90 days from application.
If the members of the Authority differ in opinion on any point, they will refer
the point to the Appellate Authority.
On whom will the advance ruling apply?
The advance ruling will be binding only–

 On the application
 On the jurisdiction tax authorities in respect of the applicant.
 If the law, facts of the original advance ruling change then the advance
ruling will not apply.
Appeal to the Appellate Authority
If the applicant aggrieved by the advance ruling he can appeal to
the Appellate Authority
Issues Raised
The applicant in his application dated 29.01.2018 has raised
following issues for determination by the Authority;
 Whether on procuring goods from China, in a context where the
goods purchased are not brought into India, is GST payable by
them?
 On the sale of goods to the company in USA, where goods sold
are shipped directly from China to USA without entering India, is
GST payable by them?
 On procuring goods from China not against specific export order,
in a context when the goods purchased are not brought into India,
is GST payable by them?
 On the sale of goods from Netherlands warehouse to their end
customers in and around Netherlands, without entering India, is
GST payable by them?
GOODS AND SERVICE TAX
CONSTITUTION (ONE HUNDRED AND TWENTY SECOND) AMENDMENT ACT, 2016
In order to address prevalent issues in taxation, the Constitution 122nd
Amendment Bill was put forth in the 16th Lok Sabha on 19 Dec 2014.
 The Bill suggests levy of GST on all goods and services, except alcohol that
humans consume.
 The tax is levied as Dual GST by the Centre and states/union territories. The
component levied by the Centre is Central Tax - CGST, while that levied by the
state is State Tax - SGST. The tax levied by union territories is Union Territory
Tax - UTGST.
 The Centre would levy the GST on inter-state trade or imports of services and
goods. This tax is referred to as Integrated Tax - IGST.
 The Central Government will also levy excise duty on tobacco products, in
addition to GST.
 The tax on five petroleum products, i.e., high speed diesel, crude, petrol,
natural gas, and Aviation Turbine Fuel (ATF) will be outlined later after a
decision is made by the GST Council.
COMPONENTS OF GST
There are 3 components of GST:
 State goods and service tax

 Central goods and service tax

 Integrated goods and service tax

 Union Territory goods and service tax

IMPORT AND EXPORT UNDER GST
Imports of Goods and Services will be treated as inter-state supplies and
IGST will be levied on import of goods and services into the country.

Exports will be treated as zero rated supplies.

Meaning Import And Export of Goods
 Section 2 (5) defines of IGST Act, 2017 defines – “Export of Goods”, with its
grammatical variations and cognate expressions, means taking out of India to a place
outside India.
 Section 2 (10) defines of IGST Act, 2017 defines – “import of goods” with its
grammatical variations and cognate expressions, means bringing goods into India from a
place outside India.

Meaning of Import Services

“Import of Services” as defined under Section 2 (11) of IGST Act, 2017 means the supply
of any service, when –
1.The supplier of service is located outside India;
2.The recipient of service is located in India; and
3.The place of supply of service is in India
Meaning of Export Services
“Export of Services” as defined under Section 2 (6) of IGST Act, 2017 means the
supply of any service, when –
1.the supplier of service is located in India;
2.the recipient of service is located outside India;
3.the place of supply of service is outside India;
4.the payment for such service has been received by the supplier of service in
convertible foreign exchange; and
5.the supplier of service and the recipient of service are not merely establishments of
a distinct person in accordance with Explanation 1 in section 8;
6.Explanation 1.— For the purposes of this Act, where a person has,—
an establishment in India and any other establishment outside India;
an establishment in a State or Union territory and any other establishment outside
that State; or
an establishment in a State or Union territory and any other establishment being a
business vertical registered within that State or Union territory then such
establishments shall be treated as establishments of distinct persons.
GST On Imports
The GST Act has defined import of goods as bringing goods into India from abroad. Accordingly,
all imports into India will be deemed as inter-state attracting IGST. In addition to the IGST, the
import would also be subject to Customs Duties. Thus, when goods are imported into India, IGST
would be applied on the value of the goods and collected along with Customs Duty. The Customs
Tariff Act, 1975 has already been amended to provide for levy of integrated tax and the
compensation cess on imported goods, in anticipation of the GST rollout.
While, GST would be applied to imports in addition to the Basic Customs Duty, GST Compensation
Cess can also be levied on certain luxury and demerit goods under the Goods and Services Tax
(Compensation to States) Cess Act, 2017.
Calculating GST on Imports
If the assessable value of goods imported into India is Rs. 100/-.
Basic Customs Duty is 10% ad-valorem.
Integrated tax rate is 18%.
Then IGST tax payable would be calculated as:
Assessable Value= Rs. 100/-
Basic Customs Duty (BCD) = Rs. 10/-
Value for the purpose of levying IGST = Rs. 110/-
GST – Integrated Tax = 18% of Rs.110/- = Rs. 19.80
Total Taxes = Rs. 29.80
Paying GST for Imports
Under The Customs Act, 1962, removal of goods from a customs station can be done only
after payment of Customs Duty and the Integrated GST tax payable. Thus, the importer
would be required to pay the Integrated tax at the time of removal of goods from a customs
station to a warehouse.

GST On Export Of Goods

In a relief to merchant exporters, the GST Council today fixed a tax rate of 0.1 per
cent on goods procured for export purposes. The merchant exporters would also be
allowed to obtain refund of 0.1 per cent tax paid on export of goods.

Are Exports Taxed Under GST?

As part of the GST regime, the government wants to make it easier for Indian
companies to export products to customers around the world. To support this goal, the
GST regime considers exports a zero-rated supply. That means that you can claim
input tax credit for your exported product, and you don’t need to pay GST on the sale.
What is Zero rated Supply?
Sec.16 (1) IGST ACT
“Zero rated supply” means any of the following supplies of goods or services or
both, namely:––
 Export of goods or services or both; or
 Supply of goods or services or both to a Special Economic Zone developer or
a Special Economic Zone unit.
Zero-rated supply does not mean that the goods and services have a tariff rate
of ‘0%’ but the recipient to whom the supply is made is entitled to pay ‘0%’ GST
to the supplier.
In other words, as it has been well discussed in section 17(2) of the CGST
Act that input tax credit will not be available in respect of supplies that have a
‘0%’ rate of tax. However, this disqualification does not apply to zero-rated
supplies covered by this section.
These provisions of zero-rated supplies are introduced in the statute on the
basis of the prevalent Central Excise and Service Tax laws. It is widely believed
that introduction of this provision will alleviate the difficulty of a supplier who
exempts goods or services or both in terms of export competitiveness.
Impact of GST on Import Export Market
Impact to export after introduction
of GST
 Spectacular benefits to the exporters

 Exports schemes such as MEIS(Merchandise exports

from India scheme) and SEIS (Services exports from
India scheme)

 Looking towards the duty drawback scheme

 Zero GST rate on exports

Impact to import after introduction
of GST
 Import as Inter-state supply

 Transaction value based valuation principle

 Refund of duty

 Withdrawal of current exemptions

JUDGEMENT
 Learnings
 We came to know about the concept of Advance Ruling
under GST.
 We came to know about The Custom Tariff Act and other
taxes.
 This research gave us about the brief knowledge of GST.
 We go to know about tax imposed on the import and
export of goods and services and how the taxation
mechanism works in import and export.
 Limitations

 Conflict in the opinions of group members.

 Lack of prior research studies on the topic.
 Fluency in using technical language.
 Collection of right quality of data for analysis.
 Recommendations

 Make GST fully functional.

 Simplify rates.
 Raise the GST exemption limit from Rs. 20 lakhs to 1
crore
 A proper adjudication method should be setup
ANY QUESTIONS ???