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

Concessional rate entitlement allows merchant exporters buying from traders to claim reduced tax and inverted-duty refunds.
Merchant exporters procuring goods from traders may avail the concessional rate of tax because the notifications imposing the concessional rate do not require procurement from manufacturers. Where output supplies attract a concessional rate lower than the rate on inputs, accumulated input tax credit may be refunded under the inverted duty provision, subject to exclusions for nil-rated or fully exempt supplies and any government-notified exclusions, as clarified by Circular 173/05/2022.