I have queries related to export by Merchant exporter. I am putting down the steps, involved in export of goods by Merchant Exporter. These are based on our understanding which we have acquired by studying advices of various experts in this forum but still have few doubts:
1. Merchant exporter execute B-1 Bond with its jurisdictional excise authorities.
2. Obtain CT-1 form and debit the running Bond register for the duty amount
3. Prepare ARE-1 form at transaction value (at the price agreed between manufacturer and Merchant exporter in local currency) and sign it.
4. Forward CT-1 and ARE-1 form to manufacturer
5. Manufacturer raises local sales invoice on Merchant exporter at the same rate/value which is mentioned on CT-1 and ARE-1 without charging Excise Duty and Sales tax with a remarks that goods being supplied against CT-1 and Form-H.
6. Duty Forgone based on local sales invoice is mentioned on ARE-1 to complete it.
7. Local sales invoice to carry name of end customer (foreign buyer to whom Merchant exporter is going to ship the product)
8. After excise examination and sealing inform the Merchant exporter about it.
9. Merchant exporter raises Export Sales Invoice on its foreign buyer in foreign currency and prepare Packing List and provide it to Manufacturer and ask him to load the material on lorry and move it to Indian custom port from where goods will be physically shipped abroad
10. In the meantime, based on export Invoice, Merchant exporter file the shipping bill with the help of its CHA
11. Manufacturer load the material and send it to custom port alongwith Export Invoice (in foreign currency) as provided by Merchant Exporter + Packing List + required copies of ARE-1.
12. Merchant exporter’s CHA take over the goods at custom port and complete the export formalities
13. Goods are physically exported
14. Merchant exporter submit the proof of export (ARE-1 copy, HBL, Export Invoice (in foreign currency + Local purchase Invoice) to its own jurisdictional excise office to discharge the bond and also send copy of the same to Manufacturer who inturn submit the same to their excise office to close the transaction.
15. Merchant exporter provide the Form-H to manufacture.
Now my queries are as follows :
(A) Are all above steps are correc ? if not, please suggest the correction in details.
(B) Point No.3 above : The value in ARE-1 will be the one agreed between Manufacturer and Merchant Exporter in Indian rupee or do we need to mention the value in foreign currency as well at which goods will be finally exported ? or both ?
(C) If on ARE-1 only local sales value is mentioned, then it will differ with Shipping Bill value because Merchant exporter will file the shipping bill at the price/value which he has agreed with its foreign buyer, which will be higher than mentioned on ARE-1 - how to address this matter ?
28 November 2017
Can you provide the case law supporting assessee that to claim exemption of merchant export, foreign buyer order not required along with Form H
CAclubindia
