Supplier under 40/2017-C.T. (Rate) vs Imports on Adv Authorisation

[Ganesh S]

Dear Experts,

I have a scenario wherein the raw materials are imported under advance authorization without payment of Customs and IGST. The finished goods manufactured using such imported raw materail is supplied to a merchant exporter following the procedure of notification 40/2017-CT (Rate) at 0.5% + 0.5% GST. Will such transactions be considered towards fulfillment of export obligation for procurement of raw materials under advance authorization?

Thanks,

Ganesh

AI Summary

Finished Goods to Merchant Exporters Don't Meet Export Obligations Under AA Without Direct Linkage, Per Notification 40/2017-CT (Rate) A discussion on a forum involves a query about whether transactions of finished goods supplied to a merchant exporter, under notification 40/2017-CT (Rate), fulfill export obligations for raw materials imported under advance authorization without duty. The initial query is from an individual questioning if such transactions count towards export obligations, especially when the merchant exporter is not an Advance Authorization (AA) or Duty Free Import Authorization (DFIA) holder. An expert clarifies that if the merchant exporter is not linked with the manufacturer holding the AA, these exports cannot be considered for fulfilling the export obligation of the AA holder.