If your exports are facilitated by Merchant Exporters, Please read this!

According to GST Notification No. 40/2017-Central Tax (Rate) and Notification No. 41/2017-Integrated Tax (Rate) both dated 23rd October 2017, when exports are facilitated through a Merchant Exporter, the Supplier has the option to supply such goods to a Merchant Exporter at a concessional rate of 0.1%.

However, this benefit is subject to several conditions:

1. The registered supplier must provide goods to the registered recipient on a tax invoice.
2. The registered recipient must export the goods within 90 days from the date of the tax invoice.
3. The registered recipient must mention the GSTIN and tax invoice number of the registered supplier in the shipping bill or bill of export.
4. The registered recipient must be registered with an Export Promotion Council or a recognized Commodity Board.
5. The registered recipient must place an order with the registered supplier for procuring goods at a concessional rate, providing a copy of the order to the supplier's tax officer.
6. The registered recipient must move the goods directly from the supplier's place to the Port, Inland Container Depot, Airport, Land Customs Station, or a registered warehouse from where the goods will be exported.
7. If the registered recipient aggregates supplies from multiple registered suppliers for export, the goods must move to a registered warehouse before being moved to the export location.
8. In such a case, the recipient must endorse the receipt of goods on the tax invoice and obtain an acknowledgment from the warehouse operator, providing these documents to the registered supplier and their tax officer.
9. Once the goods are exported, the registered recipient must provide a copy of the shipping bill or bill of export, along with GSTIN and tax invoice details, to the registered supplier and their tax officer as proof of export.

It is crucial to carefully review condition (ix) to ensure compliance with the mentioned requirements.

Please be advised that in the case of Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar vs Commissioner of Central Excise and Service Tax, Alwar (CA 1482 of 2018 | 2022 LiveLaw (SC) 203), the Supreme Court emphasized that exemption notifications should not be interpreted liberally. It is the responsibility of the assessee to demonstrate that they meet the criteria specified in the notification.

While there may be various other legal interpretations available to the assessee as a defense, it is strongly recommended to thoroughly examine whether the Merchant Exporter meets all the essential conditions to qualify for the concessional rate. Failure to meet these conditions would result in the liability to pay taxes at the normal rate.

If you are currently undergoing any departmental proceedings concerning this matter, please do not hesitate to contact me at?[email protected] ?or +91 9953357999.