GST – Started By: – Archna Gupta – Dated:- 1-5-2018 Last Replied Date:- 5-3-2019 – Dear ExpertsPlease clarify the queries mentioned below related to merchant exporters:Q-1 If, an exporter, to meet its export order, partially exports from its own manufacturing unit and partly procures from another registered supplier whether manufacturer or retailer, will he qualify for concessional rate of GST?Q-2 Whether registered supplier can be retailer also or he must be a manufacturer only to qualify for concessional rate of GST on supply made to merchant exporter?Q-3 Can merchant exporter also supply goods in domestic market?Q-4 Whether both options are available to merchant exporter for export of goods on payment of IGST or under LUT ?Q-5 Can merchant exporter claim ITC against domestic supplies (if he is allowed) or claim refund of ITC against zero rated supply under LUT (because he is exporting the goods under LUT) or claim refund of IGST (after adjusting ITC on purchase invoice at concessio
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Goods, under the said Notification, is 0.1% for IGST | The Concessional Tax Rate, in UTGST / SGST, is 0.05% CGST + 0.05% UTGST (SGST) While adopting this new Procedure, it is very much necessary that both the Registered Supplier and Registered Recipient-Exporter (Merchant Exporter), carefully follow the Procedure, prescribed under the said Notification, failing which, liability may arise. This Procedure is only for export of Goods and not for export of pure Services Both the Supplier, who may be a Manufacturer or a Trader and the Merchant Exporter, must be registered under the GST Law The Merchant-Exporter, must hold a RCMC, that is, Registration-cum-Membership Certificate of appropriate Export Promotion Council or the Commodity Board else he would not be eligible for this Procedure The Merchant Exporter, must necessarily place a Purchase Order, in writing, on the Registered Supplier, for procurement of the said Taxable Goods, at Concessional Rate, prescribed under the above mentioned
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s, from the date of Tax Invoice of the Registered Supplier, the Registered Supplier, shall not be eligible for the abovementioned Concessional Rate of 0.05% CGST + 0.05% SGST/UTGST or 0.1% IGST and therefore, the Registered Supplier, would be liable to pay off the balance amount of CGST and SGST/UTGST or IGST, applicable at appropriate rate, on the said goods, with Interest. The Merchant Exporter, is not made responsible, for his failure to export the Taxable Goods, within the prescribed time-limit of 90 days but it is the Registered Supplier, who is liable to punishment, under this provision, for failure of the Merchant Exporter. Hence the Registered Supplier should continously follow-up with the Merchant Exporter for the Proof of Exports. The Merchant Exporter, shall procure the Taxable Goods, from the place of Registered Supplier and dispatch directly, to the Port of Export, which can be Sea Port, Airport or Land Customs Station and through ICD, Alternatively, the said Taxable Goods
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GSTIN of the Registered Supplier, along with Tax Invoice No., & Date of the said Registered Supplier, in the Shipping Bill (or Airway Bill) or Bill of Export (Export by Road). Notification No., 40/2017-Central Tax (Rate), dated 23.10.2017, also involves Intra-State Transaction, it cannot be taken as Zero Rated Supply and therefore, Refund of the Tax, in the form of 0.05% CGST + 0.05% SGST/UTGST or 0.1% IGST, would not be admissible as Refund, in the form of Rebate. Hence would be a Cost to the Merchant Exporter with no Input Tax Credit nor Refund/Rebate thereof. Bond or Letter of Undertaking is not required, for the concession, granted to the extent of Normal Rate of Tax less the Concessional Rate of Tax. Note that there is no compulsion for the Registered Supplier and Merchant Exporter, to mandatorily follow the above mentioned notification. They can switch over to normal Procedure of export of Taxable Goods, without payment of IGST, under a Letter of Undertaking or Bond and claim
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change and final product may not be of the same HSN therefore, the concessional rate benefit cannot be availed for manufacturing the goods to be exported. Please refer previous issues also. Our expert may correct me if mistaken. – Reply By Praveen Nair – The Reply = Please consider amendmend to this article in Para 15.Vide GST Circular No.37/11/2018 dated 15.03.2018, merchant exporter will be eligible to take credit of the tax @ 0.05%/0.1% paid by him. – Reply By YAGAY and SUN – The Reply = Thanks for up-dating. – Reply By Kishan Barai – The Reply = Q-1 If, an exporter, to meet its export order, partially exports from its own manufacturing unit and partly procures from another registered supplier whether manufacturer or retailer, will he qualify for concessional rate of GST?Ans : Yes Q-2 Whether registered supplier can be retailer also or he must be a manufacturer only to qualify for concessional rate of GST on supply made to merchant exporter?Ans : He can be retailer alsoQ-3 Can merc
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