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Third party export under gst regime

Kamal Verma (Financial advisor) (582 Points)

27 September 2018

Dear experts,

What are the provisions for third party export under GST regime? Wheter it will be treated zero rated suppy or taxable supply? Whether export proceeds may be allowed in INR?

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5 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 27 September 2018

merchant exporter has to get GST registration and apply for E-Wallet (in place of CT-1 Earlier) after which he can be able to procure the duty free goods for export, balance formalities are similer to older one,

Exports are regulated under IGST so the excise or CGST department wil handle the file and key issues

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Satya N Dharani (Finance Professional) (491 Points)
Replied 27 September 2018

the merchant exporter can procure goods @ 0.05% CGST + 0.05% SGST and 0.1% IGST from domestic market

In case of intra-state supply – CGST is payable @ 0.05% and SGST is payable 0.05%
In case of inter-state supply – IGST is payable @ 0.1%

Conditions for Availing Exemption

In order to avail the above exemption, the Merchant Exporter must fulfil the following conditions:

The registered supplier should supply the goods to the registered recipient on a tax invoice;
The registered recipient should export the said goods within a period of ninety days from the date of issue of a tax invoice by the recipient supplier;
The registered recipient should indicate the Goods and Service Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in the shipping bill or bill of export.
The registered recipient should be registered with an Export Promotion Council or a Commodity Board recognized by the Department of Commerce;
The registered recipient shoud 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;
The registered recipient should move the said goods from place of registered supplier –
1. Directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
2. 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;
If the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier should move to a registered warehouse and after aggregation, the registered recipient should move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported;
In case of situation referred to in condition (vii), the registered recipient shall should 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
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.

It is most important to note that the Merchant Exporter will not be eligible for the above mentioned exemption (payment of GST at concessional rates) if the Merchant Exporter fails to export the said goods within a period of ninety days from the date of issue of tax invoice.