Dear professional colleagues, it is an attempt to consolidate all relevant extracts of applicable GST Law in context to 3rd Party Exports. Article explains Meaning of Third-party exports, Provisions contained in GST Law related to Third-party exports, Period for Actual Export and Documents evidencing Actual Export.

Meaning of Third-party exports

As per point 2.42 and 9.60 of FTP 2015-20 (updated as on 05.12.2017), “Third-party exports” means exports made by an exporter or manufacturer on behalf of another exporter(s).

In such cases, export documents such as shipping bills shall indicate names of both manufacturer exporter/manufacturer and third party exporter(s). Bank Realization Certificate (BRC), Self-Declaration Form (SDF), export order and invoice should be in the name of third party exporter.

Cropped finger holding white label with black frame with word GST Goods and Services Tax. Background with coin in glass jar surrounded by dry leaves and wood

Provisions contained in GST Law related to Third-party exports

As per NN 40/2017- Central Tax (R ) dt. 23.10.2017, Where there is supply by a registered supplier to a registered recipient for export, the Rate of tax leviable thereon shall be at the rate of 0.05 % of the central Tax, subject to fulfilment of the following conditions, namely: –

(i) the registered supplier shall supply the goods to the registered recipient on a tax invoice;

(ii) the registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier;

(iii) 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;

(iv) the registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce;

(v) 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;

(vi) the registered recipient 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;

(vii) if 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;

(viii) in case of situation referred to in condition (vii), 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

(ix) 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.

Period for Actual Export

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.

GST Rate

CGST – 0.05 %

SGST – 0.05 %

IGST – 0.10 %

Documents evidencing Actual Export

Mainly 2 documents are required by registered supplier evidencing the actual export by the 3rd Party Exporter/ Registered recipient:-

1. 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

2. Export general manifest or export report

Author Bio

Qualification: Student - CA/CS/CMA
Company: Taxmancers
Location: Sonipat, Haryana, IN
Member Since: 18 Nov 2019 | Total Posts: 3
An Assiduous & Accountable Tax Professional practices in both direct Tax as well as GST. Also provides services related to ROC and Labour Law Matters. View Full Profile

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2 Comments

  1. RAKESH JOSHI says:

    A manufacturer has an order from X. Invoice will be issued in the name of X, but goods should be shipped to Y. Y is an exporter. Can manufacture charge 0.10% tax.

  2. satheeshkumar says:

    we are manufacturers and trading goods to our customer out side India
    After some time, we are taking material from manufacturers and sending to our customer under LUT Programme.

    our doubt is the manufacturer can raise the invoice to us without GST.
    Manufacturers how can claim the tax above invoice. If any notification, please share us.
    Alternatively manufacturer can raise invoice by putting 0.1% tax and that tax can take against our Export invoice documents

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