Where applicant is a warehouse for storage of duty free ship stores imported without payment of duty for supply to Indian Naval/Coast Guard ships and Ocean going merchant ships, it is held that goods which are received by applicant are within Customs area as defined under section 2(11) of Customs Act, 1962 and, accordingly, goods cleared/supplied by applicant are to be treated as supply of goods in course of inter-State trade and are not an exempt supply as per definition under section 2(47) of Central Goods and Service Tax Act, 2017 as it is neither nil rated nor are exempt by any notification.
Thus, applicants are not exempted from tax under GST on their outward supplies made to ocean going merchant vessels on foreign run, Indian Naval Ships and Indian Coast Guard Ships. They can collect applicable GST from their customers, in case it is not exports. However, in case of exports option lies with applicant based on manner of exports i.e. whether they intend to export under bond or on payment of tax.
Citation:  94 taxmann.com 88 (AAR- ANDHRA PRADESH)