GST on benefits from merchant exporter

[Rajesh Kumar]

Sir/ madam

The under mentioned is an old query which now not accepting new comments, that's why I am posting again.

XYZ(Manufacturer) is supplying goods for export through PQR (Merchant Exporter). 1) In case of FOREX gain to PQR, XYZ will issue debit note to PQR to recover the same. 2) DBK amount received by PQR, will be transferred to XYZ 3) MEIS scrip will be transferred in the name of XYZ by PQR without any monetary benefit. Is XYZ liable to pay GST on all these transactions?

sir I could understand why XYX will issue debit note to recover Forex ? Why drawback will be transferred to XYZ ?

Please explain in details with provisions . As both Forex and drawback are pertains to exporter. Which provisions say these are to be transferred by merchant exporter to manufacture? Please elaborate. Regards

AI Summary

GST on transferred export benefits may be taxable as additional consideration when transfer constitutes a supply.
Transfers by a merchant exporter of benefits such as forex gain, drawback amounts and MEIS scrips may either be non-taxable financial transfers or treated as supplies/additional consideration; if treated as additional consideration (with MEIS scrip transfer treated as a supply at market value despite notification-level exemption), GST is payable by the manufacturer on those amounts and the merchant exporter may need to reverse ITC under Rule 42/43, with the manufacturer able to issue a debit note under section 34 charging GST.