CBEC has notified that inter-state/ domestic supply of taxable goods by a registered supplier to a registered recipient/ merchant exporter, for exports, shall attract a nominal GST rate of 0.1%, under CGST/ IGST/ UTGST, in line with recommendations of the 22nd GST Council Meeting held on 06/10/2017, subject to fulfillment of certain conditions, as under:
(i) the registered supplier shall supply the goods to the registered recipient on a tax invoice;
(ii) the registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier;
(iii) the registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be;
(iv) the registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce;
(v) the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;
(vi) the registered recipient shall move the said goods from place of registered supplier,–
(a) directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
(b) directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported;
(vii) if the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported;
(viii) in case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and
(ix) when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier.
The registered supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice.
CBEC Central Tax Rate Notification 40/2017 dt. 23/10/2017: 0.1% CGST Rate for Supplies to Exporters
CBEC Integrated Tax Rate Notification 41/2017 dt. 23/10/2017: 0.1% IGST Rate for Supplies to Exporters
CBEC Union Territory Tax Rate Notification 40/2017 dt. 23/10/2017: 0.1% UTGST Rate for Supplies to Exporters
These notifications are effective from which date?
The merchant exporter purchase @ 0.1% is counter productive as previously they were allowed to claim refund of the gst paid on procured material once it is exported. in the revised situation, the supplier to the merchant exporter will be able to charge only 0.1% gst, whereas he might have paid anything between 5% to 28% gst on various raw material and packing material for which, there will be no set off available to the supplier, which will result in increase in the costing of the product as set off on sale bill raised to merchant exporter is restricted to 0.1%
In case the registered supplier is not a manufacturer but a trader or authorised dealer…how will the input credit taken for the goods supplied to registered recipient treated.. 1. Can set off against other sales.. 2. Can claim refund?
my question is…. “A Merchant exporter can purchase the materials from trader (not manufacturer) for purpose of export and avail option to pay 0.1% GST under notification41/2017 GST Act
but what about the refund of gst paid by supplie?
What if the merchant exporter is not registered under GST? He cannot make purchases for export from a manufacturer?
Reference to above condition (ix)… if Merchant Exporter does not want to know their supplier that where he exported on which price / which place? as the shipping bill contains all details. What is supposed to be done to hide such confidential details>
The general practise I follow is to hide the end user’s name while keeping the export price as it is. The reason not to hide the price is that in any case, there is a QR code on the top right hand of the SB, and the INR export price can be known by the supplier if he can download the ICETRAK app.
Secondly, the supplier too knows that there will be a reasonable amount of profit margin, which will be kept by the merchant exporter; therefore, in my opinion, hiding the end user’s name is more important in the SB than hiding the price.
There is no such rule that states that the merchant exporter should not be erasing the end user’s name while submitting the SB to the supplier. As long as the SB mentions the GSTN, the tax invoice, and the name of the supplier, it’s in compliance with the requirements. I hope this answers your query.
What if the Merchant Exporter is not registered with Export Promotion Council or Commodity Board recognized by Dept. of Commerce? Still can Supplier sell the Goods to such Merchant Exporter with 0.1%. Although the Merchant Exporter will furnish all other requirement except registration with EPC/Board.
Whether merchant exporter (Trader) can use 0.1% even though he is not registered with Export Promotion Council?
No, prior fulfilling of each and every conditions is required.
If merchant exporter itself manufacture goods and intend to export the said goods. whether this provision be applicable
we have sold the Goods to Merchant exporter under 0.1% Tax. We get the shipping bill and BL copy for export proof. How to file the GSTR 1 return?
What if exporter fail to export 90days of invoices issued by domestic supplier, is supplier liable to GST full 18% or 28% if exporter failed to export 90days.
It is advisable to seek an extension from the jurisdictional GST authority under which the registered recipient i.e exporter falls, in order to escape the wrath of non-fulfillment of the pre-conditions set out in the Notifications Nos: 40 and 41 dt 23-10-2017, and further inform the registered supplier of the submission of the application seeking an extension for exporting goods beyond ninety days prescribed period.
Point2. Domestic supplier manufacturing inputs /domestic trader input credit .. against murchant exporter .. includes packing charges …how will give this tax credit ??????
Example:X was domestic supplier ,he has only supplier E. Was murchant exporter
X bying cost of product :100000 +18000GST
This total :118000/-
supply to E with 10% of profit
X sales bill :110000/-. O.1%. 110100.1
What X procurement of 118000/-
Tax difference :17910.10/-
Is that refund to X or adjust other output liability
What if E fails to export 90days that X pay GST 110000+19800GST to Their account ,
WHERE TO SHOW MERCHANT EXPORT SALES IN GSTR-1
WHAT IS THE MEANING OF REGISTERED WAREHOUSE- IN POINT 6B (IS IT WAREHOUSE REGISTERED UNDER GST OR REGISTERED BY WAREHOUSE).
If, I purchased goods under GST @0.1% and If my oversea customer canceled his order and fails to export within 90 days, then what will do?
WHAT IF MERCHANT EXPORTER/S FAILS TO MENTION THE GSTN & TAX INVOICE No. OF THE REGISTERED SUPPLIER/S IN THE S/BILL / BILL OF EXPORT?
Then, in this case, the differential 17.9% GST along with interest has to be paid to the supplier. When we buy goods under LUT Bond at 0.1% GST, the merchant exporter gives an undertaking wherein it clearly states that in the event of non-compliance with the above, the merchant exporter is liable to pay the 17.9% difference and penalty.
Therefore, it is very important to check and counter-check the CHECK LIST, which the clearing agent files and which forms the basis of the shipping bill.
The CHA may forget to mention the supplier’s GSTN, tax invoice, and in such a case, the check list must be thoroughly checked because once the shipping bill is made, it cannot be amended except in exceptional circumstances. I hope this answers your question.
Then in this case if he received Tax invoice with 0.10% in Jan-23 but he didn’t export material due to cancel order or something, so he intimated to supplier in June-23 month. Then what the supplier should do? The invoice needs to be amended on gst portal or raise the debit note to exporter, as the financial year has also moved from 2022-23 to 2023-24.
Merchant exporter can harass registered supplier by not giving shipping bill, in that case what is the liability on registered supplier? Will he be paying the GST amount? Earlier it was Form H.
We manufacture perfumes (alcohol based) for export. IGST @18% is paid by us which is being claimed. Kindly clarify if export CESS is applicable on our product or not, as the same does not figure in the CESS notification.
how to file GSTR-1 return when we charge IGST 0.1%. How to choose the below option in GSTR1 (yes ya no)…
“Is the supply eligible to be taxed at a differential percentage (%) of the existing rate of tax, as notified by the Government”?
If the purchase of goods for exports is/are within the state then do we have to split 0.1% IGT to 0.05% SGST and 0.05% CGST?
Yes
We are manufacturer exporters. Our merchant exporter has not provided our gstn and invoice no on shipping bill because of which our refunds are not being approved. What to do?
We are a merchant exporter. Can we purchase goods from within state suppliers by paying tax at rate of 0.05% CGST and 0.05% SGST?
yes provided such supply is meant for exports and the merchant exporter is supplying the said goods under LUT.
Can I purchase at 0.1% and sell to SEZ? Notification 40/2017 suggest coverage for only Merchant Exporter. Can this Notification apply to SEZ Supply?
In my opinion, it can be applied in case of supplies to SEZ provided that the goods are ultimately exported. However, complying with certain other specified conditions/ requirements may be difficult.
Please confirm I purchase goods 0.1 igst from suppliers and supplied to sez unit on zero rated. Is it possible to purchase goods on 0.1% and soppy to sez. I am supplier of goods.
Is there any provision/ clause for extension beyond 90 days, i.e. if exporter fails to export within 90 days what should he do for extension for another next 30/ 60/ 90 days?
yes he has to make an written req toh jurisdictional officer and the officer may approve such export and delay and allow the supply to be made on 0.1%
The merchant export sale, where can i shown in GST return filing?
how to file GSTR-1 return when we charge IGST 1%. How to choose the below option in GSTR1 (yes ya no)… “Is the supply eligible to be taxed at a differential percentage (%) of the existing rate of tax, as notified by the Government”?
i am a merchant exporter and i purchased material from manufacturer with 0.1% for exporting. Now i want to sell that material in domestic market to another merchant exporter who will export this material. Can I sell this material to him at 0.1% gst?
@Mayank: You can’t sell the product in domestic market which you have purchased @0.1% gst rate. You have to export such goods within 90 days from supply date.
Suppose if i bought this by paying 18% GST in this case can i sale the goods to another domestic buyer who will export this material? and can in get the refund of GST i paid to manufacturer?
Whether Software/ IT services also can be procured @ 0.1% for export by Merchant exporter?
whats the procedure which is to be followed for 0.1% GST on export? My doubt is about billing address, whether it can be in India when delivery address is overseas address? In such case 0.1% GST is applicable? If so, then whats the procedure to be done from our end?
Suppose I have received an order from a Regd. Supplier who is going to deliver the material to a dealer FOR EXPORT. What should be my rate of GST? (INTRA STATE). ##A received an Order from B and B received the order of same goods from C who is an Exporter. It is clear by the law, as amended or as per notification No.40/2018 & 41/2018 (22nd GST Council Meeting) that B will charge GST on C @0.1% but my question is…… Can A charge GST @ 0.1% on B???? Pls let me know.
Is it Mandatory to be a Manufacture to sell goods to exporter? Can A Trading Firm make a sale to an Exporter thru Export Invoice?
We are Merchant exporter and purchased goods @ 0.1% from a Manufacturer. Is there any option to claim ITC of this 0.1%?
Yes… you can claim the same as ITC.
If merchant exporter purchase goods with 0.1% rate of tax and he want export full rate of tax i.e ( 12% or 18%), this transition is valid?
We are Merchant exporter and purchased goods @ 0.1% from a Manufacturer. What if we purchase 50% of consignment @ 0.1% and 50% @ 5%/12%/18%. I mean part consignment @ 0.10%. Further, can we export the 0.1% rate purchases @ 18% (Actual GST rate of the goods) without LUT and claim refund on it?
In such circumstances, it’s better to make exports under two separate shipping bills.
What Are The Required Docs To Be Submitted By Registered Recipient (Merchant Exporter) To Jurisdictional Officer Of The Registered Supplier?
Can we supply material directly to Nepal on behalf of registered merchant exporter @.1% ??
We are a merchant exporter and purchase material for export under 0.1% rate of gst but on other related services, like Road transportation, Rail Transportation, Shipping Line Charges and other Services being taken for the subject export shipment, we have to pay GST Charges @ 9, 12, 18% which is causing blocking of funds for certain period till refund claim is processed. Is there any gst notification or Circular which makes GST ‘Nil’ or 0.01% in the above circumstances?
We export good outside India even though we are Merchant exporter do we still need to pay 18% GST to logistic Vendor.
“…The registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier…”
As per above text of the Rule, what if registered supplier has not submitted the purchase order to jurisdiction officer? normally within how many days it should be submitted?
What if registered supplier has not submitted the purchase order to jurisdiction officer? normally within how many days it should be submitted?
We have registered with DGFT and have IE Code. Is it mandatory for a Merchant Exporter to have registration with concerned Export Promotion Council in order to avail benefit of .01 % GST on Purchase. whether such registration is mandatory or not for that benefit?
Which date will be considered a Date of Exports in the case of Goods Exports? The date of the invoice, the date of the shipping bill, the date of the LEO, or the date of the EGM. What are the ramifications if goods are not exported by a merchant exporter within 90 days as per Notification No. 40/2017 Central Tax Rate dated October 23, 2017?
We are manufacturer and supplied the material to merchant exporter with 0.1% and submitted proof of export to jurisdiction officer but we have not submitted intimation. What will happen in this case?
My shipment stuck in Mumbai customs. I purchased goods at 0.1% and exported with 18% igst purely due to lack of knowledge. The customs guys are telling they will charge me penalty. It seems if we buy at 0.1%, it’s mandatory to export under LUT only.
We are manufacturers and supplying goods to a Trader @ 18% GST. He is selling them to an Exporter @ 0.1% GST which is legal. But, the Trader is asking us to apply 0.1% GST instead of 18%. As per my knowledge, whomever we are supplying with 0.1% GST should be an exporter. Please clarify.
If merchant exporter purchase goods with 0.1% rate of tax from another trader and this merchant exporter wants to export with full rate of tax i.e (@ 18%) with an intention to claim tax refund, is this transaction valid under GST/Customs?
Can you please clarify what should be the CESS amount to be charged as in the case of selling Coal to Merchant Exporter? As normally for domestic sell, we charge Rs 400/ton. Is there any concession for CESS amount too or only for IGST while selling Goods to a Merchant Exporter?
What documents are required to be submitted to GST department for sales @ 0.1%?
What to do with 12% cess to sell the Aerated drink to exporter under 0.1% tax?