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    Merchant Export Under CGST Act 2017 - Taxguru - in

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    krishna
    The document discusses provisions for merchant exports under the CGST Act 2017. It defines merchant exporters as traders who export goods that they purchase from manufacturers. Key points include: 1) Manufacturer can supply goods to registered merchant exporters at a concessional GST rate of 0.1% for export. 2) Merchant exporter must export goods within 90 days and provide shipping documents to manufacturer. 3) Merchant exporter can export under bond/letter of undertaking and claim refund of input tax credit or GST paid by supplier. The rules aim to facilitate exports by allowing manufacturers to avoid blocking of funds.

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    Merchant Export Under CGST Act 2017 - Taxguru - in

    Uploaded by

    krishna
    13 views3 pages
    The document discusses provisions for merchant exports under the CGST Act 2017. It defines merchant exporters as traders who export goods that they purchase from manufacturers. Key points include: 1) Manufacturer can supply goods to registered merchant exporters at a concessional GST rate of 0.1% for export. 2) Merchant exporter must export goods within 90 days and provide shipping documents to manufacturer. 3) Merchant exporter can export under bond/letter of undertaking and claim refund of input tax credit or GST paid by supplier. The rules aim to facilitate exports by allowing manufacturers to avoid blocking of funds.

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    Merchant Export Under CGST Act 2017- taxguru.in (1)

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    The document discusses provisions for merchant exports under the CGST Act 2017. It defines merchant exporters as traders who export goods that they purchase from manufacturers. Key points include: 1) Manufacturer can supply goods to registered merchant exporters at a concessional GST rate of 0.1% for export. 2) Merchant exporter must export goods within 90 days and provide shipping documents to manufacturer. 3) Merchant exporter can export under bond/letter of undertaking and claim refund of input tax credit or GST paid by supplier. The rules aim to facilitate exports by allowing manufacturers to avoid blocking of funds.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    13 views3 pages

    Merchant Export Under CGST Act 2017 - Taxguru - in

    Uploaded by

    krishna
    The document discusses provisions for merchant exports under the CGST Act 2017. It defines merchant exporters as traders who export goods that they purchase from manufacturers. Key points include: 1) Manufacturer can supply goods to registered merchant exporters at a concessional GST rate of 0.1% for export. 2) Merchant exporter must export goods within 90 days and provide shipping documents to manufacturer. 3) Merchant exporter can export under bond/letter of undertaking and claim refund of input tax credit or GST paid by supplier. The rules aim to facilitate exports by allowing manufacturers to avoid blocking of funds.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    MERCHANT EXPORT UNDER CGST ACT 2017

    AUTHOR :ANITA BHADRA

    https://taxguru.in/goods-and-service-tax/merchant-export-cgst-act-2017.html

    Merchant Export Under GST Act 2017 – GST Series Part 36

    1. MERCHANT EXPORT MEANING: Merchant Export means an activity by a trader who exports or intends
    to export goods. The person engaged in trading activity and export or intend to export goods is a Merchant
    Exporter. A merchant exporter is mainly engaged in the export of goods and not services.

    1.1 The Merchant Exporter purchased goods from the manufacturer & exports the same goods outside India.

    1.2 In the case of exports by the manufacturer through merchant exporter, the provision was that the
    manufacturer was required to pay tax, and the merchant exporter was required to claim the refund. This was
    blocking funds of exporters and exports were suffering.

    2. PROVISIONS FOR MERCHANT EXPORT : Provisions relating to tax on export of goods have been
    amended vide Notification Nos. 40/2017-CT (Rate), 41/2017-IT (Rate), and 40/2017 (rate) dated 23-10-2017.
    The revised provisions are as follows.

    2.1 The merchant exporter should be registered under GSTIN and Export Promotion Council or Commodity
    Board recognized by the Department of Commerce.

    2.2 The merchant exporter should place an order to the manufacturer and its copy shall be provided to the
    jurisdictional tax officer of such manufacturer.

    2.3 The registered supplier shall supply goods to merchant exporter at a concessional rate of 0.1% IGST (or
    CGST 0.05% + SGST 0.5%).

    2.4 Goods should be dispatched directly from the place of the manufacturer to port, ICD, Airport of Land
    customs station from where goods are to be exported.

    2.5 Goods can also be sent to a registered warehouse from where goods can be sent to the port, ICD, Airport of
    Land customs station from where goods are to be exported.

    2.6 The goods can be aggregated at the registered warehouse and then sent to the port, ICD, Airport of Land
    customs station from where goods are to be exported. In such a case, the merchant exporter shall endorse receipt
    of goods on the tax invoice and also the acknowledgment of receipt of goods in the registered warehouse. These
    should be provided to the manufacturer as well as to the jurisdictional tax officer of such manufacturer

    2.7 The merchant exporter is required to export the goods within 90 days from the date of issue of the tax
    invoice.
    2.8 The merchant exporter shall indicate the GSTIN of the supplier and tax invoice number of the manufacturer
    in the shipping bill or bill of export, as applicable.

    2.9 After export, the merchant exporter shall provide a copy of the shipping bill or bill of export containing
    details of the manufacturer’s GSTIN & his tax invoice with proof of filing of the export general manifest (EGM)
    or export report.

    3. SALIENT FEATURES OF MERCHANT EXPORTS

    (a) Supply by the manufacturer to a trader for export is Merchant Export & Not Zero Rated Supply

    (b) Such supply cannot be made under LUT /BOND

    (c) GST is payable at the concessional rate at the time of supply

    (d) Refund of Tax can be claimed by the manufacturer under Inverted Duty Structure

    (e) A merchant exporter can claim a refund of tax (concessional) paid to the manufacturer.

    (f) Merchant exporter is mainly engaged in the export of goods and not services.

    3.1 EXPORT BY MERCHANT EXPORTER- SALIENT FEATURES

    (a) When a merchant exporter exports the goods, it is a Zero Rated Supply.

    (b) A merchant exporter can export the goods under LUT/Bond only.

    (c) He cannot export under the IGST payment route.

    4. STATUTORY PROVISIONS

    If goods were procured on payment of 0.1% GST, export on payment of IGST not permissible.
    Rule 96(10)
    If still IGST is paid on export of goods or services, its input tax credit is not available

    Rule 96(10) of CGST Rules, inserted on 23-1-2018 but with retrospective effect from 23-10-2017
    If the manufacture has claimed the benefit of merchant exports and the merchant exporter makes the z
    Rule 89(4B)
    Such merchant exporter is eligible to claim a refund of Input Tax Credit availed in respect of other inp
    5. PAYMENT OF CONCESSIONAL TAX BY MANUFACTURER IS NOT MANDATORY – Payment of
    0.1%/0.05% tax by the manufacturer is conditional and not mandatory. The manufacturer can supply goods to
    merchant exporter on full payment of tax at a normal rate – CBI&C circular No. 37/11/2018-GST, dated 15-3-
    2018

    5.1 In such a case, the merchant exporter can export goods on payment of GST and claim the refund.
    Alternatively, he can export under bond/LUT and claim a refund of Input Tax Credit of GST paid by the
    supplier.

    6. MERCHANT EXPORT – BILL TO SHIP TO TRANSACTION: A merchant exporter can place the order
    to the manufacturer for delivering goods directly to the customer outside India. This situation can be explained
    with the help of the following Illustration:

    6.1 ILLUSTRATION

    Mr. Y ( manufacturer) & instruct Mr. Y to


    Mr. X a merchant exporter place an order to ? Mr. Z ( Customer outs
    supply directly to ?

    Mr. Y will

    Mr. X ? Bill to Mr. X & Ship to ? Mr. Z

    The transaction will be export in the hand of Mr.X. As a merchant exporter, he will file a shipping bill, generates an exp
    under LUT and claim a refund of 0.1 % GST charged by Mr. Y (manufacturer).
    It will be a supply to merchant exporter in the hands of Mr. Y (manufacturer) who will be billing to Mr.X at a concessio
    claim a refund under Inverted duty structure

    7. The procedure to claim a refund has been specified in CBI&C circular No. 94/13/2019-GST dated 28-3-
    2019/Circular No. 125/44/2019 dated 18-11-2019.

    The author can be approached at [email protected]

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