My Student got Export Order But....

[Kishan Barai]

My student got Export Order of Java Peanuts but buyer asked to do Pre-shipment inspection of goods. All company is asking for a purchase bill. Now 5% VAT has to be paid to mfg unit if purchased against bill. My student (Exporter) does not have reg. in VAT department as it is too costly in Gujarat (need to pay 25,000 adv. Tax), so how can he avoid VAT in legal sense ? How can he export goods tax free & earn reasonable profit. He is earning total 9.5% profit in this deal. If he pays VAT (which he should not pay as it is exports) he will get -5% = 4.5% profit.

Please help us to save a deal.

AI Summary

VAT registration can be necessary to avoid VAT on exports; voluntary registration may require a security deposit.
Exporter risks VAT when a buyer requires a purchase bill for pre shipment inspection. Adviser responses state VAT can be avoided only by being a registered dealer; voluntary registration in Gujarat requires a security deposit, while registration compelled by statutory turnover or transaction value thresholds does not require that deposit. A manufacturer exporter typically must obtain VAT registration to meet compliance and documentation obligations for exports.