5/25/23, 5:32 PM 0.1% GST on supplies to merchant exporter 0.

1% GST On Supplies to Merchant Exporter | Export Procedure

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Supplies to Merchant Exporter

Type of Goods Exporter

1. Manufacture Exporter

2. Merchant Exporter

Merchant Exporter means a person engaged in trading activity for exporting of goods. Merchant Exporter procures goods from the
manufacture and export same in his firm name. Merchant Exporters buy goods from the Indian manufacturers and sell them into
international market. They may not have their own manufacturing unit or processing facility.

0.1% GST on Supplies to Merchant Exporter

With recent changes of indirect tax GST introductions , the Council noticed the major difficulties for the export sector
are on account of delays in refunds of IGST and input taxes on exports. Due to delay of taxes which ideally resulting
into blockage of working capital to export business

To prevent cash blockage of exporters due to upfront payment of GST on inputs etc. the Council approved new
scheme. Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers
for export. Merchant exporter can buy goods at 0.1% for export of goods. In article we talk about GST On Supplies to
Merchant
 Exporter. 

Conditions for buying of goods at 0.1% for Merchant Export

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5/25/23, 5:32 PM 0.1% GST on supplies to merchant exporter 0.1% GST On Supplies to Merchant Exporter | Export Procedure

1. Supplier shall supply goods to Merchant Exporter on tax invoice.

2. Merchant export shall export goods with 90 days from date of tax invoice.

3. Merchant Exporter shall mention supplier GST number & tax invoice number on shipping bill , bill of export
etc

4. Merchant Export shall get registration with an Export Promotion Council or a Commodity Board recognised
by the Department of Commerce.

5. Place PO on Supplier : – the registered recipient shall place an order on registered supplier for procuring
goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of
the registered supplier

6. the registered merchant exporter shall move the said goods from place of registered supplier – (a) directly
to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be
exported; or (b) directly to a registered warehouse from where the said goods shall be move to the Port,
Inland Container  Deport, Airport or Land Customs Station from where the said goods are to be exported;

7. when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of
export containing  details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the
registered supplier along with proof of export general manifest or export report having been filed to the
registered supplier as well as jurisdictional tax officer of such supplier.

Important Documentation for Merchant Exporter

1. Buy Goods from registered supplier under GST

2. Place Purchase order on supplier for export of goods at concessional rate

3. Submit Purchase order copy to the jurisdictional tax officer of the registered supplier

4. Merchant exporter shall mention suppliers tax invoice number & GST Registration number On Export invoice,
Shipping bill etc.

5. Merchant Exporter shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax
Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general
manifest or export report

What if Export is not done in90 days from date of Tax Invoice?

The merchant exporter shall not be eligible for the above mentioned exemption if the registered recipient fails to
export the said goods within a period of ninety days from the date of issue of tax invoice.

Download Notification 
Notification No. 41/2017–Integrated Tax (Rate) – Click 

Notification No. 40/2017-Central Tax- Click 

FAQ on Application of GST for Merchant Exporter

Example for Calculation of GST Amount for Merchant Exporter ?

 
Mr. Ravi exporting inverter of $ 1000 to USA , RBI Rate of exchange on that day is Rs. 65 then taxable value shall be Rs. 65000/-  ( $
1000 x Rs. 65 ) GST amount is 1 % that is Rs. 6500 ( Rs. 65000  x 1 % ). This amount need to be paid for merchant exporter.

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Time line to receive GST Refund for exporter ?

Exporter need to submit online acknowledgement with other supporting documents at GST department / customs. Refund of 90%
value shall be transferred immediately and balance 10 % will be paid after verification of documents of document. Interest at 6 %
shall be payable for delayed GST Refund.

GST Refund for Export on payment of duty for exporter of goods ?

Exporter not required to submit documents at department. Shipping bill is a documents for taking refund amount. Customs shall verify
the information with GSTR3 B filed by person. After verification customs shall refund to persons bank statement.

Mr. Ravi is registered in Maharashtra and outsourcing inverter from Chennai and export post
is Chennai. Does Mr. Ravi need to take registration in Chennai ?

For outsourcing inverter form Chnnai, Mr. Ravi need not to take registration in Chennai. He need to take care of below points

In shipping bill mention state code of Maharashtra ( that is 27 )

At item level mention state of origin at Tamilnadu.

Gst send to Job work , GST need to pay ?

No. the goods sent by an exporter to a job worker is not a supply, as there is no transfer of title and no consideration for the goods is
involved. In terms of section 143 of the CGST Act, 2017 a registered taxable person (the principal) may send any inputs or capital
goods, without payment of GST, to a job worker for job work.

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12 Comments

Amr says: Reply

December 7, 2021 at 7:21 am

please guide..on below senario

IF A is a manufacturer, B is a Trader, and C is the Merchant Exporter,
Then C raises a Purchase order on B of 0.1% GST.
How will B deal with A?

Shobia says: Reply

February 5, 2022 at 5:59 pm

Hi

The business between A and B is normal, merchant exporter definition will only be applicable to C.

jitendra says: Reply

February 19, 2022 at 5:30 am

overall; B will raise the invoice to C at the rate of 0.1%;

Usha Gavali says: Reply

December 17, 2022 at 1:39 pm

I am merchant exporter , we bought goods @0.1% GST . we have exported the goods and now we have to send
Shipping Bill to supplier , but their is issue . In our shipping bill the supplier Gst number and tax invoice no.not
mentioned .
Kindly suggest

Usha Gavali says: Reply

December 18, 2022 at 6:04 pm

I am merchant exporter , we bought goods @0.1% GST . we have exported the goods and now we have to
send Shipping Bill to supplier , but their is issue . In our shipping bill the supplier Gst number and tax
invoice no.not mentioned .
Kindly suggest

ghanshyam says: Reply

February 19, 2022 at 6:55 am

i am merchant exporter , we bought goods @0.1% GST . we have exported the goods and now we have to send Shipping Bill to
supplier , but their is issue . if my suppliers comes to know my customer or rate he may contact him directly in future . how can we
save our details and send my supplier

 ANIL KUMAR GUPTA says: Reply


April 23, 2022 at 6:16 am

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5/25/23, 5:32 PM 0.1% GST on supplies to merchant exporter 0.1% GST On Supplies to Merchant Exporter | Export Procedure

WHERE IN THE SHIPPING BILL ARE THE SUPPLIER’S DETAILS TO BE MENTIONED ?

THERE IS NO SPECIFIC COLUMN FOR INPUTTING THE SUPPLIER’S DETAILS AS REQUIRED BY THE NOTIFICATION FOR
MERCHANT EXPORTERS

Sheikh Hamed says: Reply

May 11, 2022 at 7:29 pm

Iam a merchant exporter, manufacturers not willing to supply with out payment of applicable tax for ex 12℅ on invoice value,
What is the solution, refund, as per Gst 0.1℅ tax can be paid and export the goods
Please explain how to deal with manufacturers.

vedika says: Reply

June 24, 2022 at 9:54 am

A is Supplier B is Merchant Exporter

A gives B under Lut and B Export Goods Under Lut But B forget to indicate Name And Gst detail Of A in Shipping Bill than what B
need to do?
and what consequence come?

DINESH PRASAD SINGH says: Reply

August 6, 2022 at 5:28 am

Dear Sir,
Have one inquiry ,Our One merchant EXPORTER had purchased goods for Export purpose from supplier on terms 0.125% LUT
basis in July month 2022.
We ship cargo but by mistake not mention Supplier name and GST number in Shipping bill ,Now supplier hold our Amount TEN
LAKH and asking mention our name In shipping bill ,Is it possible we can amend shipping bill and Add Supplier name and GST
number after LEO .
is any Notification on that basis we can approach to the Customs.

Shylaja says: Reply

August 17, 2022 at 5:09 am

For procurement for the purpose of supply to SEZ units. Can we ask vendor to charge us at concessional rate of 0.1%?? Since for
all reasons SEZ is considered to be outside India and supply to SEZ from DTA is considered as Export.
Because if vendor raises invoice at 18% though we raise invoice on SEZ customer @ 0% (LUT basis), we would face cash flow.
Not sure how effective the refund of ITC will be , when we submit application

Eajaz Ahmed says: Reply

September 22, 2022 at 10:02 am

what are the HSN code to be used for create an invoice for exporters under 1% scheme.

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