GST on benefits from merchant exporter

[Kaustubh Karandikar]

XYZ(Manufacturer) is supplying goods for export through PQR (Merchant Exporter). 1) In case of FOREX gain to PQR, XYZ will issue debit note to PQR to recover the same. 2) DBK amount received by PQR, will be transferred to XYZ 3) MEIS scrip will be transferred in the name of XYZ by PQR without any monetary benefit. Is XYZ liable to pay GST on all these transactions?

AI Summary

GST Impact on Debit Notes, Duty Drawback, MEIS Scrips, and ITC Reversal in Manufacturer-Exporter Deals A discussion on the Goods and Services Tax (GST) implications for transactions between a manufacturer (XYZ) and a merchant exporter (PQR) covers several points. When XYZ issues a debit note to PQR due to a foreign exchange gain, GST is applicable as the transaction is considered local sales. The Duty Drawback (DBK) amount received by PQR is transferred to XYZ, and MEIS scrips transferred to XYZ are nil rated for GST. However, any Input Tax Credit (ITC) availed must be reversed for exempted sales. The forum also includes appreciation for contributors sharing their expertise.