Tax difference for Supplier of Merchant Exporter

[Kapil Gautam]

Hello Every Senior,
I'm Kapil Gautam, newly start a venture of manufacturing of automotive parts and fabrication of structures ( pipe, angles) in Faridabad, Haryana.

I have an order from an merchant exporter from same state but there is slight problem of tax difference between us.
Exactly, Raw Material purchased by us @18% GST and selling to merchant exporter @0.1% GST with LUT of Export. So how could i manage this difference of tax

Please help me out
> if there any mode to get refund of tax.
> domestic sale is low so couldn't manage the ratio of deduction of tax with in 1-2 years.
> someone suggest me to register a new firm only for export, GST will be refunded only for exporters or merchant exporters, not for domestic+export sale.

[email protected] / 8587871804

[Shilpi Jain]

You would be able to get refund under inverted duty structure.

[YAGAY and SUN]

In our view, refund will be available under the provisions of Export or Deemed Export on the basis of NOC from each other i.e. Merchant Exporter/Manufacturer Exporter. Goods must be exported within 90 days from the date of supply to Merchant Export. IGM date will be the basis.

AI Summary

Inverted duty structure refund where supplies to merchant exporters are backed by NOC and timely export compliance.
A supplier to a merchant exporter facing a lower outward GST rate than inward GST can seek a refund under the inverted duty structure. Refund may also be claimed under export or deemed export rules where a No Objection Certificate from the merchant exporter/manufacturer exporter and proof of export (IGM or equivalent) demonstrate that goods were exported within the prescribed period from the date of supply.