In this post we will post MCQs along with detailed Explanations surrounding the concepts asked in RTP for GST Final issued for May 2024
Question-1:
Facts
Ram Ltd. (Registered in Kerala) supplied steel sheets in the territorial waters (Located at a distance of 12 nautical miles from the baseline of Kerala and 15 nautical miles from the baseline of Tamil Nadu) to Dhruvank Builders.
Qns: Whether it would be considered as Supply ?
Answer: Yes it will be considered as Supply.
Additional Qns: If it is Supply, whether it will be considered as Inter-State or Intra-State Supply?
Answer: It will be Intra-State Supply
Additional Qns: What would be the Destination of Goods (Place of Supply) (Kerala or Tamil Nadu)
Answer: Kerala (CGST & SGST)
Additional Qns: If Ram would have registered in Tamil Nadu, what would be the Place of Supply and whether it would be Intra-State and Inter-State Supply
Answer: Place of Supply would be Kerala and it will be Inter-State Supply.
Additional Qns: What is the limit of Territorial water
Answer: The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline.
Additional Qns: If Supply is beyond Territorial water but in Exclusive Economic Zone (200 NM from Baseline), whether it will be considered as Intra-State or Inter-State Supply
Answer: It will be considered as Inter-State Supply
Explanation
As per Section Section 9 of IGST Act, 2017
In case, Supply is in territorial water of India, Place of Supply would be considered in the State where the nearest point of the appropriate baseline is located. Accordingly, Place of Supply will be considered as Kerala.
Further, as per Section 7(5)(c) of IGST, Supply
(c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.
Accordingly, Supply in Exclusive Economic Zone (away from Territorial water) would be considered as Inter-State Supply.
Legal Text Supplies in territorial waters. - Notwithstanding anything contained in this Act,- (a) where the location of the supplier is in the territorial waters, the location of such supplier; or (b) where the place of supply is in the territorial waters, the place of supply, shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located. |
Further, India is being defined in Section 2(56) of CGST Act, 2017 as :
"India" means the territory of India as referred to in article 1 of the Constitution,
its territorial waters, seabed and sub-soil underlying such waters,
continental shelf, exclusive economic zone or any other maritime zone
as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976), and the air space above its territory and territorial waters;
As per said Act,
The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline.
The exclusive economic zone of India (hereinafter referred to as the exclusive economic zone) is an area beyond and adjacent to the territorial waters, and the limit of such zone is two hundred nautical miles from the baseline.
Additional Information
As per Article 297 of the Constitution
All lands, minerals and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone, of India shall vest in the Union and be held for the purposes of the Union.
Though, up to territorial water as per Section-9, GST has been assigned to the State of baseline. However, beyond territorial water, it belongs to the Union.
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Disclaimer: We have taken due care to the best of our knowledge while explaining the provisions surrounding the issue purely for informational/academic purpose. It should not be considered as professional advice or consultancy to be relied upon. While due care has been taken by Fab Gyan in preparing this article, certain mistakes and omissions may creep in. The Fab Gyan or its Author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.