Export under IGST Paid

As per Notification No. 41/2017 – Integrated Tax (Rate) dated 23.10.2017. Please note the following:

1. As per the above notification, a registered recipient (i.e., merchant exporter) is allowed to procure notified goods from a registered supplier at a concessional GST rate of 0.1%, subject to fulfillment of specified conditions.

2. One of the key conditions prescribed under the notification is that the merchant exporter shall export the said goods under a Letter of Undertaking (LUT)/Bond without payment of IGST.

3. Therefore, exports cannot be made on payment of IGST (i.e., under Rule 96 of the CGST Rules) when the goods have been procured at the concessional rate of 0.1%. Doing so would be considered non-compliance with the conditions of the concessional procurement.

4. Hence, in your case, if you are procuring goods from a registered supplier under the merchant export route at the concessional rate of 0.1%, you shall be required to export the goods under LUT/Bond without payment of IGST, and may claim refund of unutilized Input Tax Credit (ITC) under Rule 89.