Summary: Supplies made to merchant exporters at a concessional GST rate of 0.1% require strict procedural and documentary compliance to ensure eligibility of tax relief. The supplier must first verify exporter credentials, including GST registration, EPC/Commodity Board registration, and LUT compliance, along with a purchase order clearly stating export under LUT and sharing it with the jurisdictional officer. Goods must be supplied through a tax invoice and exported within 90 days from the invoice date. Movement may be directly to ports or through registered warehouses, with proper endorsements and acknowledgements required in case of warehouse handling. Post-export documentation such as shipping bills, GST-linked export references, and EGM proof must be furnished to the supplier and tax authorities. A structured SOP ensures risk control, including pre-invoice checks, controlled dispatch, and 90-day tracking. Failure to export within 90 days results in denial of concessional benefit, making the supplier liable for full GST with interest.
Point to be checked while transaction done for sale at 0.1% to Merchant Exporter.
- Check and Avail for registration of merchant exporter with Export promotion council or commodity Board.
- Avail LUT Registration/GST Registration Copy of Merchant Exporter as export by merchant exporter must be under LUT only.
- A copy of purchase order should be availed from exporter clearly mentioning that goods meant for export under LUT and same copy need to be submitted by merchant exporter to jurisdictional tax officer of the registered supplier i.e. our jurisdiction tax officer.
- Supply goods to Merchant exporter on Tax Invoice with Concessional Rate.
- Goods needs to be exported within 90 days from the date of tax invoice issued by registered supplier i.e. our
- Goods can be moved directly to port or to registered warehouse by Merchant exporter- if it moves to registered warehouse -avail endorsement copy of goods received on tax invoice along with acknowledgement of receipt of goods in the registered warehouse and same should be filed by merchant exporter to jurisdiction tax officer of supplier i.e. our jurisdiction tax officer.
- when goods have been exported- merchant exporter must provide copy of shipping bill/bill of export containing GSTN of supplier and Tax Invoice reference number along with proof of EGM/Export report to supplier and jurisdiction officer of supplier i.e. our jurisdiction tax officer
The registered supplier shall not be eligible for the above mentioned relief if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice. And, then, such supplier is liable to pay tax at normal rate of tax under GST along with Interest
Practical “supplier-first” SOP (what to do end-to-end)
Step 1 — Before invoicing
Obtain exporter KYC : GST registration details (GSTIN status) EPC/Commodity Board registration proof (RCMC etc.)
Obtain purchase order explicitly stating procurement at concessional rate.
Obtain evidence that PO copy was provided to supplier’s jurisdictional officer.
Step 2 — Invoicing (concessional tax invoice) Issue tax invoice (not bill of supply).
Step 3 — Dispatch and movement control Ensure movement route (direct export point or registered warehouse).
Step 4 — Post-dispatch (documents you must collect) If warehouse route/aggregation: endorsed invoice + warehouse acknowledgement; copies to supplier and supplier’s officer.
After export: shipping bill/bill of export with linkage + proof of EGM/export report filed; copies to supplier and supplier’s officer.
Step 5 — 90-day control (risk trigger) Maintain an invoice-wise 90-day export tracker.
The registered supplier shall not be eligible for the above mentioned relief if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice. And, then, such supplier is liable to pay tax at normal rate of tax under GST along with Interest
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