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IGST-EXPORRT

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Ravi Chandran

45 Points Posted on 28 March 2023

Please guide me the following queries.

1. I am a merchant exporter.

2. I will give a job to a factory to manufacturing some components for export to UAE.

3. The factory will purchase steel and other items.

In this case what about the GST to purchase the raw materials. Is it need to pay the IGST (18%) to the material seller. The order worth is nearby 1 crore. I not able to dumping 18 lac as GST.

Please guide and give your suggestions to fulfill the order.

Thanking you

D.Ravichandran

Coimbatore

Replies (2)

Quick Summary

This discussion addresses a merchant exporter's concerns about paying IGST on raw materials purchased for an export order. The exporter needs to understand the GST implications when a factory manufactures components using materials bought from suppliers, especially when the factory and supplier are in different states and the final product is for export to Dubai. Guidance is sought on how to manage the significant GST liability on raw materials and potential options for refunds or offsetting input tax credits.

Ashok

Tax Payer

45 Points Posted on 28 March 2023

If the factory is also in Coimbatore or anywhere in TN, they will issue you an invoice with SGST & CGST.

If you have any unpaid excess CGST liability, SGST input tax credit cannot offset CGST liability.

Coming to exports, IGST is 0% i.e you charge no GST on this order to your customer. So may be you have an option if you pay your inputs to your vendors would be to claim the unutilized ITC by filing a GST refund application accompanied by evidence.

If you file returns quarterly, see if you can offset this ITC towards any other orders from your other outward / customers invoices.