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  • Writer's pictureRajesh Audithyan

Do you know ? IGST 0.1% only applicable on purchase when the buyer intend to export !!

When compared to past 41 months Indian export data, August 2019 is the worst month since Exports from India is reduced to 6%. Another side Exporters are facing cash crunch due to delay and confusions in IGST refund. Even though various IGST refund week programmes are conducted still Exporters are not getting refund on time to invest back in Exports.

Let us see one important mechanism with which merchant exporters can control cash outflow by way of GST. Illustration : A Chennai based exporter buys turmeric from a Erode based seller and plans to export it as it is. Now he has to buy the product @ 5% GST then apply for IGST refund. But he can pay only 0.1% GST under notification 41/2017 and even get it back after completion of export process.

Following are the key points ;

· Notification No 41/2017 Integrated Tax (Rate) dated 23rd October, 2017

· Applicable for transaction between GST registered seller and registered merchant exporter only

· Merchant exporter must be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce

· Product has to be delivered to Port/ICD/CFS/dock directly OR directly to a registered warehouse from where the said goods shall be move for exports customs clearance

· Merchant exporter can bring export cargoes from various suppliers to his registered warehouse to aggregate goods before export

· Procurements under this Notification has to be exported within 90 days

· After export process Merchant exporter has to give copy of Shipping bill to supplier for his GST compliance. Here very importantly he shall give a copy after blocking his overseas buyer name address and price in marker pen to keep his commercials confidential.

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