“non-taxable territory” means the territory which is outside the taxable territory;
A taxable territory means the territory to which the provisions of the GST law applies. Accordingly, in case of CGST law, the taxable territory would cover all locations covered under the extent of the law – i.e., whole of India.
Accordingly, locations outside India would be considered as non-taxable territory, being the territory outside the taxable territory.
Similarly, for the State GST law, non-taxable territory would cover all those locations where the provisions of the particular State GST law would not apply. For instance, for the purpose of the State GST law of Maharashtra, all other States and Union Territories of India, and locations outside India, would be non-taxable territory.
In this regard, it would be relevant to understand the geographical extent covered within the meaning of the term ‘India’ – refer analysis of Section 2(56).
Supply taking place in a ‘non-taxable territory’ would be outside the jurisdiction for imposing any GST. High sea sales (first supply) are not liable to GST because goods that involve movement are located outside the taxable territory even though the recipient may be inside.