FTWZ Sale Not Supply | No TN GST Registration Needed—AAR

Case Details: West Pharmaceutical Packaging India (P.) Ltd., In re - [2025] 175 taxmann.com 1038 (AAR-TAMILNADU)

Judiciary and Counsel Details

• B. Suseel Kumar & Balakrishna S., Member

Facts of the Case

The applicant, registered in Telangana under the CGST Act and the Telangana GST Act, is engaged in trading rubber stopper products for pharmaceutical use, imported through a Free Trade Warehousing Zone (FTWZ) located in Tamil Nadu, where the applicant has no business activity or presence. The applicant sold goods while they were lying in the FTWZ warehouse before clearance for home consumption. It was noted that ‘warehoused goods’ as specified in clause 8(a) of Schedule III of the CGST Act includes goods warehoused in an FTWZ. The applicant sought a ruling on whether such transactions attract Customs duty or IGST, and whether a separate GST registration is required in Tamil Nadu. The matter was accordingly placed before the AAR Tamil Nadu.

AAR Held

The AAR, Tamil Nadu, held that the sale of goods while lying in the FTWZ warehouse before clearance for home consumption is not a ‘supply’, and hence, no Customs duty or IGST arises on such transactions. It held that Customs duty and IGST are leviable only when warehoused goods are cleared for home consumption. It further held that the applicant’s registration in Telangana is sufficient to meet tax compliances, if any, and that no separate registration is required in Tamil Nadu under Section 22 of the CGST Act or the Tamil Nadu GST Act.

List of Cases Referred to

• AIE Fiber Resource & Trading (India) (P.) Ltd., In re [2022] 137 taxmann.com 220/91 GST 630 (AAR – TELANGANA) (para 4.17)
• Sadesa Commercial Offshore De macau Ltd., In re [2019] 102 taxmann.com 42/72 GST 215/21 GSTL 265 (AAR – TAMILNADU) (para 4.17)
• Kamdhenu Agrochem Industries LLP, In re [2021] 132 taxmann.com 273/88 GST 973 (AAR – MAHARASHTRA) (para 4.17)
• Gandhar Oil Refinery (India) Ltd. In re [2019] 106 taxmann.com 291/76 GST 446/26 GSTL 531 (AAR – MAHARASHTRA) (para 4.17)
• Aarel Import Export (P.) Ltd., In re [2019] 106 taxmann.com 292/74 GST 662/26 GSTL 261 (AAR – MAHARASHTRA) (para 4.17)
• Sonkamal Enterprises (P.) Ltd., In re [2018] 100 taxmann.com 213/20 GSTL 498 (AAR – MAHARASHTRA) (para 4.17)
• Pine Subsidiary Industry, In re [2022] 134 taxmann.com 294/90 GST 115 (AAR – KARNATAKA) (para 4.17)
• Kardex India Storage Solution (P.) Ltd., In re [2020] 116 taxmann.com 865/81 GST 339/35 GSTL 424 (AAR – KARNATAKA) (para 4.17).