Applicablity of Concessional Rate of Tax on Supply to Merchant Export in case of 'Bill to--Ship to' Model
The learned author seeks to make an analytical study of the issue as to whether concessional rate of tax of 1% prescribed under Notification No. 41/2017-Integrated (Rate), dt. 23-10-2017, would be applicable in case of supply of goods by the merchant exporter on Bill to Ship to Model.
1. Concessional Rate of tax under Notification No. 41/2017-Inegrated Tax (Rate)
In the GST regime, the government has provided special relief to the merchant exporters by way of reducing the GST rate for purchasing goods from domestic suppliers for export. Accordingly, Notification Nos. 40/2017-Central Tax (Rate) and 41/2017 Integrated Tax (Rate) both dated 23-10-2017 stipulates that intra-state/inter-state supplies of taxable goods by a registered supplier to a merchant exporter shall be chargeable to GST at 0.05% (in the case of intra-State supplies) and 0.1% (in the case of inter-state supplies) subject to the fulfilment of the following conditions:
(i) The goods are supplied by a registered supplier on a tax invoice
(ii) The goods are exported by the registered recipient (merchant exporter) within a period of 90 days from the date of issue of the tax invoice by the registered supplier.
(iii) the merchant exporter shall indicate the GSTIN of the registered supplier and the tax invoice number issued by the registered supplier in the Shipping Bill or Bill of export
(iv) The merchant exporter shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce.
(v) The purchase order for supply of goods at concessional rate shall be provided to the jurisdictional tax officer of the registered supplier.
(vi) The merchant exporter shall move the goods from the place of the registered supplier -
(a) directly to the Port, ICD, Airport or Land Customs Station from where the goods are to be exported; or
(b) directly to a registered warehouse from where the said goods shall move to the Port, ICD, Airport or Land Customs Station from where the goods are to be exported.
(vii) If the merchant exporter intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the merchant exporter shall move the goods to the Port, ICD, Airport or Land Customs Station from where they shall be exported.