Realization of Export proceeds

[Deepak Bubna]

Hello,

What is the implication for an exporter under LUT if proceeds from such exports are received from a third party.

AI Summary

Third-Party Payments for Exports: No GST Issues if Properly Declared and Documented Under FEMA Rules. An exporter inquired about the implications under the Goods and Services Tax (GST) Act when export proceeds are received from a third party. According to responses, if a declaration is made on the Shipping Bill that proceeds will be received from a third party related to the original importer, there is no issue. Under the Foreign Exchange Management Act (FEMA), third-party payments are allowed if certain conditions are met, such as routing through banking channels and proper documentation. GST does not apply to exports, and if the bank accepts third-party payments and the export is completed, there are no GST issues.