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

[Asked by 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.

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

Export of second-hand goods: exporters may pay IGST and claim refund; transaction value governs export valuation.
Second-hand dealers may export used goods if the buyer accepts them. Where tax is paid on export, the exporter can claim a refund. Although the margin scheme sets taxable value as the difference between selling and purchase price for dealers who have not availed input tax credit, it poses practical issues for exports because it requires disclosing purchase price. For export taxation, the transaction value shown on the export invoice is advised as the basis for tax payment rather than applying the margin scheme.