Merchant Export

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

A Manufacturer got an order from EPC Contractor in the same state but End- User in other country. EPC Contractor Placed order with one line item as "Supply and Erection" Means value not separated for both. If manufacturer making invoice with gst @ 0.1% as per merchant export rate, any tax issues will arise for future erection work?

Thanks In Advance.

AI Summary

Merchant export GST applies to goods only; separate service value on combined invoices to avoid incorrect tax treatment.
Merchant export rate applies only to the value of goods; erection services in a non taxable territory are not subject to GST. If a contract/invoice combines "supply and erection," the supplier must segregate the values and cannot apply the merchant export rate to the combined amount. Engage a chartered or cost accountant to determine and document the correct value allocation for compliance.