What is a merchanting transaction?
In a merchanting transaction the trader is not importing or exporting goods, but sending it directly from its origin (the supplier’s country) to its destination (the end buyer’s country) for profit.
What is merchanting trade transactions MTT?
Merchanting Trade transaction is a transaction which involves shipment of goods from one foreign country to another foreign country involving an Indian Trader. This is a trade transaction where both import transactions and export transactions are involved.
Is GST applicable on merchanting trade?
2019 and GST is not applicable on merchant trade transactions with effect from 01.02. 2019.
What is the difference between high sea sales and merchanting trade?
Also as per, RBI Guidelines “For a trade to be classified as merchanting trade, goods acquired shall not enter the Domestic Tariff Area.” This is the stark difference between High Sea Sales and Merchant trade transaction. While the former must be followed by ultimate import, the later must not include import.
What is the completion date of merchanting trade transaction?
The commencement date of merchanting trade shall be the date of shipment / export leg receipt or import leg payment, whichever is first. The completion date shall be the date of shipment / export leg receipt or import leg payment, whichever is the last.
Is trader and merchant the same?
As nouns the difference between trader and merchant is that trader is one who gains a livelihood from trading goods or securities while merchant is a person who traffics in commodities for profit.
Can exporter buy goods without paying GST?
An exporter can pay the IGST (Integrated GST) applicable on the goods at the time of export and seek a refund. As on date there is no mechanism for purchase of goods without GST for the purpose of export.
What is the GST rate on export?
The export of goods or services is considered as a zero-rated supply. GST will not be levied on export of any kind of goods or services. A duty drawback was provided under the previous laws for the tax paid on inputs for the export of exempted goods.
Is TCS applicable on high sea sales?
Yes, A person selling goods as part of High Sea Sales, cannot be said to be an importer. Section 206C(1H) exempts from its purview a buyer who imports goods into India. Thus in our view, the person selling the goods as High Seas Sales shall collect TCS from the person buying the goods.
Is GST applicable on high sea sales?
HSS is not exempt supply rather, HSS transaction is covered in Schedule III and is considered as NO SUPPLY. As there is no supply, GST cannot be charged on such sales, and hence there is no question of ITC relating to such transaction.
What is the maximum amount of ECB under automatic route?
Limit and leverage: Under the aforesaid framework, all eligible borrowers can raise ECB up to USD 750 million or equivalent per financial year under auto route.
What are the two types of merchants?
Broadly, merchants can be classified into two categories:
- A wholesale merchant operates in the chain between the producer and retail merchant, typically dealing in large quantities of goods.
- A retail merchant or retailer sells merchandise to end-users or consumers (including businesses), usually in small quantities.
What is merchanting trade transaction in India?
The merchant or the intermediary will be resident in India. That’s why the merchanting trade transaction is also known as intermediary trade. As per the revised guidelines, Merchanting Trade Transaction should satisfy the following conditions:
What are the new guidelines for merchanting trade?
With a view to further facilitate merchanting trade transactions, the existing guidelines have been reviewed and the revised guidelines as under, are being issued in supersession of the A.P. (DIR Series) Circular ibid: For a trade to be classified as merchanting trade, goods acquired shall not enter the Domestic Tariff Area.
How will credit be available for merchanting trade transactions?
Short-term credit either by way of suppliers’ credit or buyers’ credit will be available for merchanting trade transactions, to the extent not backed by advance remittance for the export lag, including the discounting of export leg LC by an AD bank, as in the case of import transactions ;
What are merchanting goods?
Hence, It is also called Intermediary Trade Goods involved in the merchanting trade transactions would be the ones that are permitted for exports (except Export Declaration Form)/imports (except Bill of Entry) under the prevailing Foreign Trade Policy (FTP) of India.