GST is a dual tax levied by both central and state governments on the supply of goods and services. GST has been implemented across all states and union territories in India and has replaced the multiple central and state taxes structure.

All businesses in India are required to register and migrate to the GST structure.

GST will replace the following taxes which are currently levied:

The government of India has identified three models of GST, depending on whether the center or the states/union territories are allowed to collect revenue from taxation:

1. Central GST (CGST) – Tax to be levied by the Centre on intra-state supply of goods and services.

2. State GST (SGST)/Union Territory GST (UTGST) – Tax to be levied by the States/Union Territories on intra-state supply of goods and services.

3. Integrated GST (IGST) – Tax to be levied by Centre on inter-state supply of goods and services, and on imports.

For goods, a tax structure of four types of rates has been finalized by the government:

SGST is applicable in all states across India. UTGST is applicable in the union territories of :

1. Andaman and Nicobar Islands

2. Chandigarh

3. Dadra and Nagar Haveli and Daman and Diu

4. Lakshadweep

Delhi and Pondicherry have State Legislatures and will be treated as states under GST law. The applicable GST on intra-state supply within Delhi and Pondicherry will be CGST and SGST.

The nature of tax i.e. whether CGST + SGST / UTGST or IGST depends on whether the transaction is an inter-state supply or an intra-state supply.

If the location of the service provider and the place of supply are in the same state, it will be an intra-state supply and CGST and SGST / UTGST will be applicable.

However, if the location of the service provider and the place of supply are in different states, IGST will be applicable as the transaction is in the nature of an inter-state supply.

The supply of goods/ services to an SEZ customer in any state / union territory holding valid SEZ GST registration for the authorized operations of SEZ are considered as zero-rated supply. In case GST is to be levied, only IGST can be levied for SEZ supplies, irrespective whether the transaction is inter-state or intra-state.

Place of Supply Rules as effective from 1 October 2023:

India payer [section 12(8) of the IGST Act]

Customers registered under GST are referred to as B2B (Business to Business); whereas unregistered customers are termed as B2C (Business to Consumers). In case the supply is made to a B2B customer located in India, place of supply shall be the location of the customer. In case the supply is made to a B2C customer located in India, place of supply shall be the pick-up location.

Non-India payer [section 13(2) of the IGST Act]

With effect from 1 October 2023, place of supply for any invoice issued to a customer location outside Indian territory, shall be the location of the customer outside India. In such cases, the services shall be treated as export (zero-rated) and no GST shall be charged to the customer.

Integrated GST (IGST) and Basic Customs Duty (BCD) are applicable on the import of goods. The duties payable on import of goods under GST include:

1. education cess on the Basic Customs Duty paid

2. safeguard duties; and

3. anti-dumping duties

IGST on the import of goods will be payable by the importer of goods or by a person authorized to pay the duty on behalf of the importer.

Under the previous tax system, service tax was paid to the Central Government for all services irrespective of the state in which the services were provided.

Under GST, services will be assessed and taxed by both Central and State Governments and paid by the service provider in the state in which the services are offered. The GST for specific goods and/or services has now been standardized across all states in India.

No. Since the services will be taxed at a state level, all relevant compliances i.e., registrations, returns, refunds etc., must be undertaken at the state level for supply of services. You will need to obtain separate registration for each state where you have a place of business.

For services provided by FedEx, the applicable GST rates are:

GST is calculated based on the location from where FedEx provides the service and the place of supply denoting the location, from where you have availed the service.

No.

The GST registration status of the customer, ‘Bill to Payor’ option selected when you update the Air Waybill (AWB) and the type of transaction (Domestic, International, Freight /Duty), along with origin / destination determines the FedEx location and the place of supply.

• For import shipments, the location of clearance is the FedEx location on the invoice and the place of supply is either the destination location or the payer state, depending on the ‘Bill to’ option selected on the Air WayBill.

• For export shipments, the state in which the shipment has been picked up i.e., the origin is the FedEx location on the invoice and the place of supply is either the origin location or the payer state, depending on the ’Bill to’ option selected on the Air Waybill.

• If you are located at the place from where the pick–up is done, select ‘Shipper’ on the Air Waybill.

• If you are located at the place from where the delivery is done, select ‘Consignee’ on the Air Waybill.

• You can select ‘Third Party/Other Party’ on the Air Waybill in the following cases:

  • If you are neither the shipper nor the consignee.

  • If you are neither located at the place of pick-up nor the place of delivery.

The account number used must be aligned to the ‘Bill to Payor’ option selected on the Air Waybill.

• ‘Bill to Shipper’ transactions - Use the account number that belongs to the origin state of the shipment.

• ‘Bill to Consignee’ transactions - Use the account number that belongs to the destination state of the shipment.

• ‘Bill to Third party’ transactions - Use the account number that neither belong to Origin nor the delivery state.

The applicable tax is determined as per GST law for registered or unregistered customer, as the case may be. You must provide the relevant FedEx account number at the retail outlet, on which the invoice will be issued.

Please ensure that you provide your FedEx account number at the retail counter for all transactions. If the account is GST registered and updated in the FedEx database, then FedEx will charge you IGST on the shipment. You can avail input tax credit on such invoice. However, if you are not registered under GST, FedEx will charge CGST + SGST / UTGST as applicable in the location of handover of the shipment. It is advisable that you issue a verification document to your employees/representatives who will hand over the shipment at the FedEx retail outlet, authorizing them to provide your customer account number to FedEx for billing purposes.

If the customer located in SEZ has a SEZ GST registration, FedEx will not be charging GST on these shipments used for authorized operations of the SEZ Unit (zero rated). 

FedEx will treat such customers as unregistered customers for the specified state.

No, the customs duty that FedEx pays on your behalf is not subject to GST. However, any advancement fee or ancillary fee shall be subject to GST.

FedEx will issue a credit note in the following circumstances post internal assessment:

• services are found to be deficient

• or due to any other invoice related dispute.

You are required to disclose the details of the credit note in the period in which the credit note was issued. Please reverse the input tax credit for the difference in amount. In cases where credit notes are issued by FedEx on account of any of the aforementioned reasons, resulting in a reduction of tax liability, you are required to reduce your claim of input tax credit to that extent so that FedEx can make appropriate tax adjustments.

Credit will be available to you on the basis of the Bill of Entry filed on the import of goods.

In case of any additional questions, please contact your FedEx Sales Representative or email us at India@fedex.com.