Special GST Rate for Merchant Exporter on Purchase @ 0.1%


When an Exporter Purchases the goods,he has to pay GST

However on Sales,He can give Bond

In this case,he will have input but no output

So he has to claim refund of this input and his funds keep on blocking for a long time

So,in this case,Government has given a concession that on Purchase,he will have to pay less GST @ 0.1%


Normal Case     Exporter Giving Bond(Normal Scheme)   Exporter Giving Bond(0.1% Scheme)
Purchase 100000   Purchase 100000   Purchase 100000
GST 5% 5000   GST 5% 5000   GST 0.1% 100
TOTAL 105000   TOTAL 105000   TOTAL 100100
Sales 140000   Sales 140000   Sales 140000
GST 5% 7000   GST 5% 0   GST 5% 0
TOTAL 147000   TOTAL 140000   TOTAL 140000
Output 7000   Output 0   Output 0
Input  5000   Input  5000   Input  100
GST Payable 2000   GST Payable 0   GST Payable 0
      GST Refund 5000   GST Refund 100
      (More Funds Blocked)     (Less Funds Blocked)  

Conditions to be fulfilled to Claim Scheme

He should be a Merchant Exporter and not a Manufacturer Exporter

Sale Should be made within 90 Days of Invoice Date

Vendor shall deliver goods direct at Custom Port/Airport(and not to exporter)

Exporter shall provide Vendor as well as GST Departmnent copy of export


Q1 - A factory purchasing Raw Material from Vendor,converting into finished goods and exporting them

Can they purchase goods @ 0.1% scheme?

View Answer


Q2 - An Export House purchasing goods from Vendor and packing it in its premises and exporting them

Can they purchase goods @ 0.1% scheme?

View Answer

Q3 - A software company purchasing servers and providing techinical service outside India

Can they purchase goods @ 0.1% scheme?

View Answer

Q4 - An Export House RS Exports gets order for 1000 kg of Stainless steel

It purchases goods at following Rates(GST Extra)

GST Rate of good is 12%

A Ltd,Delhi @ 40/kg 300 40 12000
B ltd,Punjab @ 60/kg 500 60 30000
C ltd,Delhi @ 50/kg 200 50 10000

A ltd provides goods to Export House premises while B and C supply it directly to Custom Port

RS Exports sells goods @ $5/kg submitting bond/lou to govt

Prepare GST Computation and Refund Available

Exporter Giving Bond(0.1% Scheme)     Exporter Giving Bond(Normal Scheme)  
Purchase from B 30000   Purchase from  A 12000
purchase from C 10000   Gst @12% 1440
GST 0.1% 40      
TOTAL 40040   TOTAL 13440


Sales 300000
GST 5% 0
TOTAL 300000


Output 0
Input  1480
GST Payable 0
GST Refund 1480


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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.