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

Concessional GST rate for merchant exporters requires strict documentation and supplier liability if exports are not proved within the time limit.
Merchant exporters may procure goods from GST registered suppliers at a concessional tax rate under Notification No. 40/2017 provided both parties comply with procedural requirements: the merchant exporter must hold an RCMC, issue a written purchase order and supply self attested export documents and shipping details to the supplier and its jurisdictional officer; the supplier must invoice at the notified concessional rate and will lose the concessional benefit and become liable for normal tax with interest if export proof is not furnished within ninety days.