Merchant Exporters

[Archna Gupta]

Dear Experts

Please clarify the queries mentioned below related to merchant exporters:

Q-1 If, an exporter, to meet its export order, partially exports from its own manufacturing unit and partly procures from another registered supplier whether manufacturer or retailer, will he qualify for concessional rate of GST?

Q-2 Whether registered supplier can be retailer also or he must be a manufacturer only to qualify for concessional rate of GST on supply made to merchant exporter?

Q-3 Can merchant exporter also supply goods in domestic market?

Q-4 Whether both options are available to merchant exporter for export of goods “on payment of IGST” or “under LUT”?

Q-5 Can merchant exporter

• claim ITC against domestic supplies (if he is allowed) or
• claim refund of ITC against zero rated supply under LUT (because he is exporting the goods under LUT) or
• claim refund of IGST (after adjusting ITC on purchase invoice at concessional rate of GST) against zero rated supply on the payment of IGST.

AI Summary

Merchant exporters eligible for concessional GST rates under Notification No. 40/2017, regardless of supplier type; domestic sales not refunded. A merchant exporter raised queries about the applicability of concessional GST rates when exporting goods partially from their own manufacturing unit and partially from other suppliers. Responses clarified that exporters can qualify for concessional GST rates (0.1% IGST or 0.05% CGST + 0.05% SGST/UTGST) under Notification No. 40/2017, regardless of whether the supplier is a manufacturer or retailer. Merchant exporters can also supply goods domestically but won't receive GST refunds for domestic sales. They have options to export goods either on payment of IGST or under a Letter of Undertaking (LUT) and can claim Input Tax Credit (ITC) or refunds accordingly.