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Supplies to Merchant Exporter

Type of Goods Exporter

1. Manufacture Exporter

2. Merchant Exporter

Merchant Exporter means a person engaged in

trading activity for exporting of goods. Merchant
Exporter procures goods from the manufacture
and export same in his firm name. Merchant
Exporters buy goods from the Indian
manufacturers and sell them into international
market. They may not have their own
manufacturing unit or processing facility.

0.1% GST on Supplies to

Merchant Exporter

With recent changes of indirect tax

GST introductions , the Council noticed
the major difficulties for the export
sector are on account of delays in
refunds of IGST and input taxes on
exports. Due to delay of taxes which
ideally resulting into blockage of
working capital to export business

To prevent cash blockage of exporters

due to upfront payment of GST on
inputs etc. the Council approved new
scheme. Merchant exporters will now
have to pay nominal GST of 0.1% for
procuring goods from domestic
suppliers for export. Merchant exporter
can buy goods at 0.1% for export of
goods. In article we talk about GST On
Supplies to Merchant Exporter.

Conditions for buying of

goods at 0.1% for
Merchant Export

1. Supplier shall supply goods

to Merchant Exporter on tax
invoice.
2. Merchant export shall
export goods with 90 days
from date of tax invoice.
3. Merchant Exporter shall
mention supplier GST
number & tax invoice
number on shipping bill ,
bill of export etc
4. Merchant Export shall get
registration with an Export
Promotion Council or a
Commodity Board
recognised by the
Department of Commerce.
5. Place PO on Supplier : – 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
9. the registered merchant
exporter 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;
7. 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.

Important Documentation
for Merchant Exporter

1. Buy Goods from registered supplier

under GST
2. Place Purchase order on supplier
for export of goods at concessional
rate
3. Submit Purchase order copy to the
jurisdictional tax officer of the
registered supplier
4. Merchant exporter shall mention
suppliers tax invoice number &
GST Registration number On
Export invoice, Shipping bill etc.
5. Merchant Exporter 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

What if Export is not done

in90 days from date of Tax
Invoice?

The merchant exporter 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.

Download Notification
Notification No. 41/2017–Integrated Tax
(Rate) – Click

Notification No. 40/2017-Central Tax- Click

FAQ on Application of GST

for Merchant Exporter

Example for Calculation of GST

Amount for Merchant Exporter
?
Mr. Ravi exporting inverter of $ 1000 to USA ,
RBI Rate of exchange on that day is Rs. 65 then
taxable value shall be Rs. 65000/- ( $ 1000 x
Rs. 65 ) GST amount is 1 % that is Rs. 6500 (
Rs. 65000 x 1 % ). This amount need to be
paid for merchant exporter.

Time line to receive GST

Refund for exporter ?
Exporter need to submit online
acknowledgement with other supporting
documents at GST department / customs.
Refund of 90% value shall be transferred
immediately and balance 10 % will be paid after
verification of documents of document. Interest
at 6 % shall be payable for delayed GST
Refund.

GST Refund for Export on

payment of duty for exporter
of goods ?
Exporter not required to submit documents at
department. Shipping bill is a documents for
taking refund amount. Customs shall verify the
information with GSTR3 B filed by person. After
verification customs shall refund to persons
bank statement.

Mr. Ravi is registered in

Maharashtra and outsourcing
inverter from Chennai and
export post is Chennai. Does
Mr. Ravi need to take
registration in Chennai ?
For outsourcing inverter form Chnnai, Mr. Ravi
need not to take registration in Chennai. He
need to take care of below points

In shipping bill mention state code of

Maharashtra ( that is 27 )

At item level mention state of origin at

Tamilnadu.

Gst send to Job work , GST

need to pay ?
No. the goods sent by an exporter to a job
worker is not a supply, as there is no transfer of
title and no consideration for the goods is
involved. In terms of section 143 of the CGST
Act, 2017 a registered taxable person (the
principal) may send any inputs or capital goods,
without payment of GST, to a job worker for job
work.

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4 Comments

Amr says: Reply

December 7, 2021 at 7:21 am
please guide..on below senario
IF A is a manufacturer, B is a Trader, and C
is the Merchant Exporter,
Then C raises a Purchase order on B of
0.1% GST.
How will B deal with A?

Shobia says: Reply

February 5, 2022 at 5:59 pm
Hi

The business between A and B is normal,

merchant exporter dePnition will only be
applicable to C.

jitendra says: Reply

February 19, 2022 at 5:30 am
overall; B will raise the invoice to C at the
rate of 0.1%;

ghanshyam says: Reply

February 19, 2022 at 6:55 am
i am merchant exporter , we bought goods
@0.1% GST . we have exported the goods
and now we have to send Shipping Bill to
supplier , but their is issue . if my suppliers
comes to know my customer or rate he
may contact him directly in future . how
can we save our details and send my
supplier

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