Merchanting trade in GST

This is covered in schedule III to CGST/SGST Act as transaction which will neither be treated as taxable goods nor services - please find below the entry :

"7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India". 

Not ITC reversal is needed for this. 

Strictly speaking it need not be shown in GSTR1/3B since it is a non-supply transaction - but suggested to be shown under table 8(4) of GSTR1 and 3.1(e) of GSTR3B. 

Can be converted to INR using the customs rate applicable for the relevant period (customs notification can be found on ICEGATE or CBIC website).