GST on Third Party Exports

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GST on Third Party Exports
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• Third-party exports means exports made by an
  exporter or manufacturer on behalf of another
  exporter(s). In such cases, shipping bills shall
  indicate the name of both the exporter/
  manufacturer and exporter(s). The applicable GST
  rate for third party exports are as follows-
• -For intra-State supply, GST should be applied
  at the rate of 0.05 vide notification no.
  40/2017 dated 23.10.2017 -For inter-State
  supply, GST should be applied at the rate of 0.1
  vide notification no. 41/2017 dated 23.10.2017
  Understanding of Intra-state supply and
  Inter-state supply
• What is an Intrastate Supply?
• Intra State supply of products or services
  occurs when the suppliers location and the place
  of supply, i.e., the buyers location, are both
  in the same state. A vendor must collect both
  CGST and SGST from the customer in intra-state
  transactions.
• What is an Interstate supply?

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• When the provider and the place of supply are in
  different states, this is referred to as
  inter-state supply.
• Points to remember for Intra State Supply
• On every transaction of taxable supply of goods
  and services on an intra-state basis, the Central
  GST (CGST) and State GST (SGST) shall be imposed
  simultaneously.
• A seller must collect both the State Goods and
  Services Tax (SGST) and the Central Goods and
  Services Tax (CGST) from a buyer in Intra State
  Supply.
• The Central Goods and Services Tax (CGST) is to
  be placed with the federal government, while the
  State Goods and Services Tax (SGST) is to be
  deposited with the state government.
• The rates of GST would remain the same for the
  goods or services but the GST rate and the tax
  amount will be divided equally under two heads
  namely the SGST and CGST.
• Intra-State supply is applicable when the goods
  or/and services are supplied with in the same
• 1. State
• 2. Union Territory

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• Point to remember for Inter-State Supply
• As per the GST Act, Interstate supply means the
  transportation of goods or services between the
  state and union territory.
• Before they reach the customs station, products
  delivered to India are frequently referred to as
  an Inter-State Supply.
• The Integrated GST (IGST) would be charged on
  every taxable supply of goods transaction
  services provided on an interstate basis. It
  would also be based on the same price or value.
• Calculated in accordance with Section 15 of the
  CGST Law.
• Inter-state is applicable on the domestic supply
  means when the place of supplier and the place of
  supply are
• 1. Two different states
• 2. Two different regions under one Union
  Territory or
• 3. State and a UT
• Inter-state supply also includes the goods
  or/and service supplied from or special economic
  zone (SEZ) or export-oriented unit (EOU).
• Diagram of Intra-state and Inter-state

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• Conditions of GST under Third Party Exports for
  Intra-state supply and Inter-state supply
• the registered supplier shall supply the goods
  to the registered recipient on a tax invoice
• the registered recipient shall export the said
  goods within a period of 90(ninety days) from the
  date of issue of a tax invoice by the registered
  supplier
• the registered recipient shall indicate the
  Goods and Services Tax Identification Number of
  the registered supplier and the tax invoice
  number issued by the registered supplier in
  respect of the said goods in the shipping bill or
  bill of export, as the case may be
• the registered recipient shall be registered with
  an Export Promotion Council or a Commodity Board
  recognised by the Department of Commerce
• 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
• the registered recipient shall move the said
  goods from place of registered supplier

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• directly to the Port, Inland Container Deport,
  Airport or Land Customs Station from where the
  said goods are to be exported or
• 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 exportedif
  the registered recipient 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 registered recipient shall
  move goods to the Port, Inland Container Deport,
  Airport or Land Customs Station from where they
  shall be exported
• the registered recipient shall endorse receipt
  of goods on the tax invoice and also obtain
  acknowledgement of receipt of goods in the
  registered warehouse from the warehouse operator
  and the endorsed tax invoice and the
  acknowledgment of the warehouse operator shall be
  provided to the registered supplier as well as to
  the jurisdictional tax officer of such supplier
• and 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

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• The registered supplier 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.
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