Can a merchant exporter procure goods from a Non Manufacturer?

[Sukhpal Singh]

Dear All,

Can a merchant exporter procure goods from a person who is not a manufacturer but a trader and export it?

If yes, then it can still take benefit of the concessional rate of 0.1% as per Notification No. 40/2017 and 41/2017.

And if the concessional rate benefit is allowed then the trader can claim refund as per inverted duty structure rule?

Please guide with references (if any) ?

AI Summary

Merchant exporters can source from traders for 0.1% GST rate under Notifications 40/2017 & 41/2017; refund claims possible. A merchant exporter can procure goods from a trader, not just a manufacturer, and still benefit from the concessional GST rate of 0.1% as per Notifications No. 40/2017 and 41/2017. There are no restrictions in these notifications requiring procurement from manufacturers to avail this benefit. Additionally, traders can claim a refund under the inverted duty structure rule, provided the conditions outlined in Circular 173/05/2022 are met. This includes scenarios where the tax rate on inputs is higher than on output supplies due to concessional notifications, allowing for refund claims of accumulated input tax credit.