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 andSUN]

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

Automotive parts manufacturer grapples with GST rate discrepancy; explores refund options under inverted duty structure. A manufacturer of automotive parts in Haryana faces a tax discrepancy when selling to a merchant exporter due to differing GST rates: 18% on raw materials and 0.1% on exports. The manufacturer seeks advice on managing this tax difference and potential refunds. Responses suggest that a refund is possible under the inverted duty structure or through provisions for Export or Deemed Export, contingent on compliance with specific conditions, such as exporting goods within 90 days of supply. It is also suggested that establishing a separate firm for exports might facilitate GST refunds.