Whether the second goods dealer can export the second hand goods?

[Guest]

Hii friends, i have a couple of questions for you.

Whether the second hands dealer can export second hand goods?

Suppose if he exported goods with payment of tax then whether he can claim refund or not?

On which valuation scheme he is has to pay tax in customs station whether on Transaction scheme or Margin scheme?

[KASTURI SETHI]

Query-wise reply is as under:-

1. If your buyer is willing to purchase second hand goods, there is no restriction in GST law.

2. Yes. Refund/rebate can be claimed.

3. Tax is to be paid on transaction value.

[Guest]

Sir but In margin Scheme we have to discharge tax on Margin only.

[KASTURI SETHI]

Margin scheme is for those who deal in the business of sale and purchase of second hand goods. I am of the view that if you export, transaction value will be more appropriate. Views of other experts are also solicited.

[Rajagopalan Ranganathan]

Sir,

According to rule 32 (5) of CGST Rules, 2017 "where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored."

Now the answers for your query are as under: -

1. Second hand dealer can export second hand goods provided it i is acceptable to the recipient of the goods.

2. If the second goods are exported on payment of IGST then the exporter can claim refund of tax paid.

3. the value for export is the transaction value as indicated in the export invoice.

However, one problem in margin scheme is that the seller has to declare his purchase price in the export invoice and no seller would like to disclose his margin to the recipient.

[KASTURI SETHI]

Agree with Sh.Ranganathan, Sir, but margin scheme is not meant for export. Transactional value has to be taken into account for payment of tax. Otherwise also, there is no loss to the exporter as refund of the tax paid is admissible.

One cannot enjoy benefits of both worlds.

AI Summary

Exporting Second-Hand Goods Under GST: Permissible with Buyer Agreement; Use Transaction Value, Not Margin Scheme A discussion on whether a second-hand goods dealer can export such goods under GST law highlights several points. It is confirmed that exporting second-hand goods is permissible if the buyer agrees. Exporters can claim a refund of taxes paid on exported goods. The transaction value should be used for tax purposes rather than the margin scheme, which applies to domestic sales of second-hand goods. The margin scheme involves paying tax on the difference between the selling and purchase prices, but it is not suitable for exports as it requires disclosing the purchase price, which sellers may not prefer.