Goods export from mumbai to bhutan
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 October 2014
HELLO DEAR ALL,
I HAVE QUERY RELATED TO MVAT REGISTERED DEALER GOING TO SOLD / EXPORT GOODS TO BHUTAN. I WANT TO KNOW IS MVAT APPLICABLE OR NOT AND DEALER IS ONLY HAVING IEC. THEY ARE NOT REGISTERED WITH EXCISE AS THEY ARE ONLY IMPORTING GOODS AND SOLD IT TO LOCAL OR INTERSTATE DEALER.
PLEASE CLARIFY RELATED TO VAT AND EXCISE DUTY.
PLEASE MAIL ON PRADEEPKUMAR95@GMAIL.COM
I HAVE QUERY RELATED TO MVAT REGISTERED DEALER GOING TO SOLD / EXPORT GOODS TO BHUTAN. I WANT TO KNOW IS MVAT APPLICABLE OR NOT AND DEALER IS ONLY HAVING IEC. THEY ARE NOT REGISTERED WITH EXCISE AS THEY ARE ONLY IMPORTING GOODS AND SOLD IT TO LOCAL OR INTERSTATE DEALER.
PLEASE CLARIFY RELATED TO VAT AND EXCISE DUTY.
PLEASE MAIL ON PRADEEPKUMAR95@GMAIL.COM
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 October 2014
still waiting suggestions............ can anyone help me.
26 July 2024
When exporting goods from Mumbai to Bhutan, several tax and regulatory considerations apply. Here’s a detailed breakdown of the relevant VAT and Excise Duty implications for such a transaction:
### **1. VAT (Value Added Tax)**
**a. Applicability of MVAT**
- **Export of Goods**: Under Maharashtra Value Added Tax (MVAT) regulations, the export of goods from India to a foreign country, including Bhutan, is generally considered a **"zero-rated supply"**. This means that while the transaction is subject to VAT, the applicable VAT rate on such exports is zero percent.
- **Tax Credits**: Even though the VAT rate is zero, exporters are allowed to claim a refund of the input tax credit (ITC) on purchases used in making the zero-rated exports. Therefore, the MVAT itself does not apply to the sale, but the dealer can claim a refund for the VAT paid on inputs.
**b. Registration Requirement**
- **VAT Registration**: If a dealer is registered under MVAT, they must comply with the rules concerning zero-rated exports and claim the input tax credit. However, if the dealer is not registered for MVAT and is not required to be, they cannot claim a refund on input tax credits.
### **2. Excise Duty**
**a. Applicability of Excise Duty**
- **Excise Duty**: Excise duty is generally levied on the manufacture of goods, not on their sale or export. Since the dealer is exporting goods and is not involved in the manufacture of goods (if they are only importing and selling), excise duty typically does not apply to their activities.
- **Importers**: If the dealer is importing goods and not manufacturing them, excise duty would not be applicable. They must, however, ensure compliance with customs regulations for imports.
**b. IEC (Import Export Code)**
- **IEC**: The dealer must have an Import Export Code (IEC) issued by the Directorate General of Foreign Trade (DGFT) to legally export goods. The IEC is necessary for customs clearance but does not directly impact VAT or Excise Duty.
### **3. Export Procedures**
**a. Documentation and Compliance**
- **Export Documentation**: Ensure that all necessary export documentation is prepared, including export invoices, packing lists, shipping bills, and any certificates of origin required by Bhutanese authorities.
- **Customs Procedures**: Follow customs procedures for export, including the submission of the export declaration and compliance with the regulations specified by Indian Customs.
**b. GST Considerations**
- **GST Regime**: Under the GST regime, exports are also considered zero-rated supplies. Therefore, similar to MVAT, the applicable GST rate on exports is zero percent, and exporters can claim a refund of the input tax credit on inputs used in making the zero-rated export.
### **Summary**
- **MVAT**: For exports from Mumbai to Bhutan, MVAT is not applicable as the transaction is considered zero-rated. The dealer can claim a refund of input tax credits on inputs used for the export.
- **Excise Duty**: Generally, excise duty is not applicable for dealers involved only in the trading of imported goods without manufacturing.
- **IEC**: Ensure that the dealer has an IEC for the export.
- **GST**: If transitioning to GST, the same principle applies—exports are zero-rated, and input tax credits can be claimed.
Make sure to consult with a tax advisor or export consultant to ensure compliance with all local and international regulations and to handle any specific requirements related to exports to Bhutan.
### **1. VAT (Value Added Tax)**
**a. Applicability of MVAT**
- **Export of Goods**: Under Maharashtra Value Added Tax (MVAT) regulations, the export of goods from India to a foreign country, including Bhutan, is generally considered a **"zero-rated supply"**. This means that while the transaction is subject to VAT, the applicable VAT rate on such exports is zero percent.
- **Tax Credits**: Even though the VAT rate is zero, exporters are allowed to claim a refund of the input tax credit (ITC) on purchases used in making the zero-rated exports. Therefore, the MVAT itself does not apply to the sale, but the dealer can claim a refund for the VAT paid on inputs.
**b. Registration Requirement**
- **VAT Registration**: If a dealer is registered under MVAT, they must comply with the rules concerning zero-rated exports and claim the input tax credit. However, if the dealer is not registered for MVAT and is not required to be, they cannot claim a refund on input tax credits.
### **2. Excise Duty**
**a. Applicability of Excise Duty**
- **Excise Duty**: Excise duty is generally levied on the manufacture of goods, not on their sale or export. Since the dealer is exporting goods and is not involved in the manufacture of goods (if they are only importing and selling), excise duty typically does not apply to their activities.
- **Importers**: If the dealer is importing goods and not manufacturing them, excise duty would not be applicable. They must, however, ensure compliance with customs regulations for imports.
**b. IEC (Import Export Code)**
- **IEC**: The dealer must have an Import Export Code (IEC) issued by the Directorate General of Foreign Trade (DGFT) to legally export goods. The IEC is necessary for customs clearance but does not directly impact VAT or Excise Duty.
### **3. Export Procedures**
**a. Documentation and Compliance**
- **Export Documentation**: Ensure that all necessary export documentation is prepared, including export invoices, packing lists, shipping bills, and any certificates of origin required by Bhutanese authorities.
- **Customs Procedures**: Follow customs procedures for export, including the submission of the export declaration and compliance with the regulations specified by Indian Customs.
**b. GST Considerations**
- **GST Regime**: Under the GST regime, exports are also considered zero-rated supplies. Therefore, similar to MVAT, the applicable GST rate on exports is zero percent, and exporters can claim a refund of the input tax credit on inputs used in making the zero-rated export.
### **Summary**
- **MVAT**: For exports from Mumbai to Bhutan, MVAT is not applicable as the transaction is considered zero-rated. The dealer can claim a refund of input tax credits on inputs used for the export.
- **Excise Duty**: Generally, excise duty is not applicable for dealers involved only in the trading of imported goods without manufacturing.
- **IEC**: Ensure that the dealer has an IEC for the export.
- **GST**: If transitioning to GST, the same principle applies—exports are zero-rated, and input tax credits can be claimed.
Make sure to consult with a tax advisor or export consultant to ensure compliance with all local and international regulations and to handle any specific requirements related to exports to Bhutan.
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