clarification of accounting for ct-1 sales

[Asked by Guest]

dear experts,

we are manufacturer and also exports the goods, apart from we are selling the goods to the merchant exporters under CT-1 sales now query comes under accounting treatment..

1) if i sales to our merchant exporter against taking CT-1 in this case we (manufacturer) filed ER-1 and shows under Export CT-1 clearance but how to treat this sales under accounting ...this sales will be treated under export sales or domestic sales or deemed export ....?

2) same reverse case merchant exporter procuring the goods against CT-1 from manufacturer and same goods export so this sales will be treated under which head?

pls. clarify this issue .....

regards,

Manan PANDYA

Cell : 9510018659

[Mahir S]

The answer to both your above queries is that such sales shall be treated as export sales.

sir,

export sales for manufacturer as well as merchant exporter both party will show their sales in balance sheet under export sales group?

but foreign currency will be received by merchant exporter then ?

still i am getting confusion...

pls. clarify sir..

regards,

Manan Pandya

[YAGAY and SUN]

Dear Manan,

For Manufacturer exporter it is sales during the exports and for Merchant exporter it is export sales. Proof of export would be submitted by the Merchant Exporter. Manufacturer exporter would be benefited for not charging the C.E. Duties as well as non charging of VAT/CST on the strength of form H. Where as Merchant exporter can get the benefits of export promotions schemes on the submission of NOC from Manufacturer Exporter to Merchant Exporter. For Both the parties it is Deemed Export and Export.

Regards,

SameerMalhotra- Consultant

YAGAY and SUN - Management, Business and Indirect Tax Consultants

[Mahir S]

Sir,

thanks for the reply. hope the query is resolved

AI Summary

Export sales classification: CT-1 transactions are treated as export sales, affecting excise and VAT treatment and benefits.
Sales under CT-1 are treated as export sales for accounting; manufacturers record CT-1 transactions and file ER-1 as export CT-1 clearances, while merchant exporters record purchases and exports as export sales. Manufacturer benefits include non charging of central excise and non application of VAT/CST on the basis of Form H, and merchant exporters, who receive foreign exchange, may claim export promotion benefits upon submission of a manufacturer NOC and proof of export.