2026-VIL-64-AAR
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SGST Advance Ruling Authority

GST – Tamil Nadu AAR - Value of Taxable Supply for export under DDP terms - The applicant, a garment manufacturer, exports goods under Delivered Duty Paid (DDP) terms, where the supplier undertakes to deliver the goods at the doorstep of the recipient and assumes responsibility to bear all costs until the goods reach their destination - Whether the transaction value for the export of goods under DDP terms should include the reimbursed expenses such as ocean freight, insurance, foreign import duties, delivery charges, and other costs incurred abroad until the goods reach their destination, and whether IGST should be paid on these expenses – HELD - As per the provisions of Section 15(1) of the CGST Act, 2017, the value of taxable supply shall be the 'transaction value' which is the price actually paid or payable for the said supply, where the supplier and the recipient are not related, and the price is the sole consideration for the supply. Further, as per Section 15(2)(c) of the Act, the 'incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services', are liable to be included in the value of supply - In the instant case, under the DDP model, the responsibility for delivery of goods, including all costs and risks until the goods reach the buyer's designated location, is with the applicant, and the applicant absorbs all the expenses. Therefore, all such charges, including the reimbursed expenses, are liable to be included in the value of taxable supply for the purpose of payment of IGST on export of goods - All the expenses incurred by the applicant under DDP terms until the goods reach the buyer's destination, including the expenses of reimbursable nature, are liable to be included in the value of taxable supply for the purpose of payment of IGST on export of goods in terms of Section 15 of the CGST Act, 2017, read with Section 20 of the IGST Act, 2017 – Ordered accordingly
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