Export of goods without Importing into India

[Shubham Kansal]

Dear Sir/Ma’am, I want to know about the RBI & FERA/FEMA compliancies for Export of goods without Importing into India. Indian company in the receipt of order from a county (X) for which Indian company have Import same goods from another country (Y), company is planning to deliver the same goods directly from Country (X) to Country (Y) without Importing into India. Kindly confirm about the RBI & FERA/FEMA compliancies for the same

[YAGAY andSUN]

RBI/2019-20/152 A.P. (DIR Series) Circular No.20 January 23, 2020

GST will also be applicable as per various Advance Rulings. Please check.

[Shubham Kansal]

Thanks...

can you share AAR also?

[MUKUND THAKKAR]

You need to co related inward remittance and outward remittance with the nominal margin of 5 to 10%. No GST is applicable under sh.(III) (7) of CGST.

[Jayaprakash Kamath]

Transaction can be done under Merchanting trade transaction. Transaction date will start from shipment date or outward remittance date or inward remittance date whichever is earlier and transaction should be completed within nine months. Outlay of funds if any should not be more than four months

AI Summary

Merchanting trade transaction: direct delivery without import permitted subject to RBI/FEMA compliance, GST and remittance linkage requirements. Export transactions routed directly between two foreign countries without import into India may be treated as merchanting trade under FEMA/RBI rules, requiring correlation of inward and outward remittances to reflect a nominal commercial margin, alignment of the transaction date with shipment or remittance events, completion within the prescribed commercial timeframe, and consideration of GST applicability as informed by Advance Rulings.