Question7:

Can you please expalin the concept of Notification No.40/2017 CT dated 13-10-2017 since it does not make any meaning.

Answer:

In a case where goods are exported through merchant exporter, the manufacturer actually supplies his goods to a merchant exporter which is a domestic supply. Domestic supplies are invariably to be made on payment of applicable GST. In such cases, the merchant exporter in fact exports the goods and not the manufacturer. Before the issuance of Notification No. 40/2017-CT dated 13.10.2017, a manufacturer was required to supply goods at full effective rate of integrate tax to a merchant exporter. As a measure to facilitate exports, Government has reduced effective rate of integrate tax to 0.1% instead of full rate. when we calculate tax at the rate of .1% it comes to very nominal amount it is Rs 1000 on sale of Rs 10 lacs so the collection of tax can't be the intention of law even working and deposit of tax will cost more to the Government So the intention in this case seems that
i The transaction are taken in record
ii The data relating there to may be segregated as and when required for policy making etc in future
iii This route of export is to be kept separate and the clearance is considered as taxable for the purpose of providing ITC without disturbing definition of zero rated supply as given in section 16 of IGST Act (Reply dt. 11/11/2017)