Urgent need help to calculate export duty
This query is : Resolved
01 July 2015
hi experts,
i want to know 2 thngs
1) if i export cloths to canada through e-business , say rs 100000rs then how much taxes i have to pay as coustom duty, and what requirement i have to fullfill under fema
2) if rather then directly sales in canada, i transfer to mr x in canada (i.e wholesaler ), who later ll sell the cloth, will its be proftable as whole assuming mr x is also my family member
i want to know 2 thngs
1) if i export cloths to canada through e-business , say rs 100000rs then how much taxes i have to pay as coustom duty, and what requirement i have to fullfill under fema
2) if rather then directly sales in canada, i transfer to mr x in canada (i.e wholesaler ), who later ll sell the cloth, will its be proftable as whole assuming mr x is also my family member
01 July 2015
you are admissible to DGFT INCENTIVE AS MEIS SCHEME.
BOTH CONDITION WILL CALL EXPORT.
WILL U SUPPLY HERE ITC HS CODE OF THESE ITEMS...
BOTH CONDITION WILL CALL EXPORT.
WILL U SUPPLY HERE ITC HS CODE OF THESE ITEMS...
12 July 2015
i didnt knw the code yet, but its cotton tshirts
02 August 2025
Here’s an urgent guide on **export duty and related tax & FEMA requirements** for exporting cotton T-shirts to Canada via e-business or through a family member wholesaler:
---
### 1) Export Duty & Taxes on Export of Cotton T-Shirts to Canada
* **Customs Duty on Exports:**
* **Generally, exports from India are exempt from customs duty**.
* So, on exporting cloth/T-shirts, **no customs duty payable by exporter**.
* Instead, exporters benefit from **Duty Drawback** or **MEIS (Merchandise Exports from India Scheme)** incentives.
* **GST on Exports:**
* Exports are treated as **zero-rated supplies** under GST.
* You can claim refund of Input Tax Credit (ITC) on inputs used.
* **FEMA Requirements:**
* Export proceeds must be realized and repatriated within **9 months** from the date of export.
* Export invoice and shipping documents should be maintained.
* Exporter must report transactions in **Foreign Exchange Management System (FEMS)** and comply with RBI regulations.
---
### 2) Export via Mr. X (Family Member Wholesaler) in Canada
* If you **transfer goods to Mr. X in Canada**:
* It will be treated as **export by you if goods physically cross from India**.
* Mr. X becomes importer/wholesaler in Canada and sells there.
* You need to **issue export invoice** and comply with export formalities.
* **Is it more profitable?**
* Profitability depends on pricing, duties in Canada, and logistics cost.
* Since Mr. X is family, you can negotiate better terms, but transfer pricing rules may apply.
* Ensure **arm’s length pricing** to avoid tax issues.
---
### Summary Table:
| Aspect | Direct Export (e-business) | Export via Mr. X (Wholesaler) |
| --------------------- | ------------------------------------- | ----------------------------------------------- |
| Customs Duty in India | NIL (Exports are duty-free) | NIL |
| GST | Zero-rated, ITC refund available | Zero-rated export by you |
| FEMA Compliance | Export proceeds repatriation required | Same, as exporter |
| Profitability | Depends on direct sales margin | Depends on transfer pricing & wholesaler margin |
---
### Action Points:
* Identify **HS Code** for cotton T-shirts for export documentation.
* Ensure all export documents & shipping bills are in place.
* Consult with tax expert on **transfer pricing** if exporting via family wholesaler.
---
If you want, I can help you with **HS Code lookup**, export documentation checklist, or FEMA compliance checklist. Would that help?
---
### 1) Export Duty & Taxes on Export of Cotton T-Shirts to Canada
* **Customs Duty on Exports:**
* **Generally, exports from India are exempt from customs duty**.
* So, on exporting cloth/T-shirts, **no customs duty payable by exporter**.
* Instead, exporters benefit from **Duty Drawback** or **MEIS (Merchandise Exports from India Scheme)** incentives.
* **GST on Exports:**
* Exports are treated as **zero-rated supplies** under GST.
* You can claim refund of Input Tax Credit (ITC) on inputs used.
* **FEMA Requirements:**
* Export proceeds must be realized and repatriated within **9 months** from the date of export.
* Export invoice and shipping documents should be maintained.
* Exporter must report transactions in **Foreign Exchange Management System (FEMS)** and comply with RBI regulations.
---
### 2) Export via Mr. X (Family Member Wholesaler) in Canada
* If you **transfer goods to Mr. X in Canada**:
* It will be treated as **export by you if goods physically cross from India**.
* Mr. X becomes importer/wholesaler in Canada and sells there.
* You need to **issue export invoice** and comply with export formalities.
* **Is it more profitable?**
* Profitability depends on pricing, duties in Canada, and logistics cost.
* Since Mr. X is family, you can negotiate better terms, but transfer pricing rules may apply.
* Ensure **arm’s length pricing** to avoid tax issues.
---
### Summary Table:
| Aspect | Direct Export (e-business) | Export via Mr. X (Wholesaler) |
| --------------------- | ------------------------------------- | ----------------------------------------------- |
| Customs Duty in India | NIL (Exports are duty-free) | NIL |
| GST | Zero-rated, ITC refund available | Zero-rated export by you |
| FEMA Compliance | Export proceeds repatriation required | Same, as exporter |
| Profitability | Depends on direct sales margin | Depends on transfer pricing & wholesaler margin |
---
### Action Points:
* Identify **HS Code** for cotton T-shirts for export documentation.
* Ensure all export documents & shipping bills are in place.
* Consult with tax expert on **transfer pricing** if exporting via family wholesaler.
---
If you want, I can help you with **HS Code lookup**, export documentation checklist, or FEMA compliance checklist. Would that help?
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