GST Liability on Goods Scrapped on Direction of Customer

In re: Dolphine Die Cast Private Limited – Ruling dated May 20, 2020 – Authority for Advance Rulings (Karnataka)

Background: Applicant manufactures steel dies, as specified by foreign customer. Without movement of such dies, the applicant invoices the recipient abroad in foreign currency. At the end of useful life, the applicant may sell such dies as scrap in India, as directed by the foreign customer. Alternately, the applicant may export such dies to the overseas customer.

Ruling: If the steel dies are sold as scrap as aforesaid (i.e., without the said dies being moved out of India), the applicant should collect and pay applicable GST.

Comment(s): Once the applicant invoices the foreign customer, the latter becomes the owner of steel dies. When the steel dies are sold as scrap in India by the applicant merely on the directions of foreign customer, how can the applicant be liable to pay GST, except in the capacity of an agent but for which due foundation has not been laid in the ruling?

Srinivasan V, Advocate

Recent Posts

HC quashes GST notice & order for non-quantification of interest in notice

Issue The show cause notice issued to the Petitioner did not quantify the proposed demand…

3 months ago

Is limitation period of 2 years applicable to duplicate payments under GST law?

Issue The petitioner in the citation referred first infra, by mistake, made a duplicate payment…

3 months ago

Opportunity to prove bona fides must be given to recipient before ITC denial on account of supplier’s fault: Gauhati HC

Issue The Petitioner had questioned the validity of Section 16(2)(aa) of the CGST Act, 2017.…

7 months ago

Fee collected by universities not subject to GST: Karnataka HC

Decision / Observations [Order of the Hon'ble High Court of Karnataka, dated 24.11.2025, in WP.…

7 months ago

60 days time limit to pass GST refund order is mandatory: Calcutta HC

Decision / Observations [Order of the Hon'ble High Court of Calcutta, dated 30.07.2025, in M.A.T.…

12 months ago

CA certificate for receipt of net forex acceptable in lieu of FIRCs: Gujarat HC

Facts The Petitioner, engaged in export of services, had claimed refund of unutilized GST Input…

1 year ago