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Notification No. 40/2017 – UTTR Explained

by Shakshi Bharti | Jun 4, 2024 | GST, 2017 Notifications, Notifications, Union Territory Tax (Rate) 2017 Notifications | 0 comments

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Important Keyword: Notification 40/2017 UTGST Rate, concessional GST for exports, merchant exporter GST, 0.05 GST export supply, GST export notification India, export concessional rate GST, GST on export procurement, UTGST export rules, merchant exporter concessional GST, GST export compliance India,

Words: 1359 Read time: 7 minutes.

[F. No. 354/117/2017-TRU (Pt. III)]
Government of India
Ministry of Finance
Department of Revenue

New Delhi, the 23^rd October, 2017

Notification No. 40/2017 - Union Territory Tax (Rate): Seeks to prescribe Union Territory tax rate of 0.05% on intra-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions.

GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R.….(E).- In exercise of the powers conferred by sub-section (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) (hereafter in this notification referred to as “the said Act”), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council,

hereby exempts the intra-State supply of taxable goods (hereafter in this notification referred to as “the said goods”) by a registered supplier to a registered recipient for export, from so much of the Union territory tax as leviable thereon under section 7 of the Union Territory Good and Services Tax Act, 2017 (14 of 2017), as is in excess of the amount calculated at the rate of 0.05 per cent., subject to fulfilment of the following conditions, namely: -

the registered supplier shall supply the goods to the registered recipient on a tax invoice;

the registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier;

the registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be;

the registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce;

the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;

the registered recipient shall move the said goods from place of registered supplier –

directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
- directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported;

if the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported;

in case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and
when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier.

2. The registered supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice.

(Ruchi Bisht)
Under Secretary to the
Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 40/2017 - Union Territory Tax (Rate)

Q1: What is Notification No. 40/2017 – UTGST Rate?

Answer:
It provides concessional UTGST rate of 0.05% on intra-State supply of taxable goods for export purposes.
The benefit applies subject to strict conditions and export compliance requirements.

Q2: What is the purpose of this notification?

Answer:
The main purpose was to reduce working capital burden on exporters.
Instead of paying full GST and later claiming refund, exporters could procure goods at concessional tax rate.

Q3: Who can claim benefit under this notification?

Answer:
Registered suppliers supplying goods to registered exporters for export purposes can use this scheme.
Both supplier and recipient must be GST registered.

Q4: What is the concessional UTGST rate prescribed?

Answer:
The notification prescribes UTGST rate of 0.05%.
This is concessional tax applicable subject to fulfilment of specified conditions.

Q5: Is export mandatory under this scheme?

Answer:
Yes.
Goods procured under concessional rate must be exported within 90 days from invoice date.

Q6: What happens if export is delayed beyond 90 days?

Answer:
The concessional benefit may become invalid.
The supplier may become liable for differential tax because exemption conditions fail.

Q7: Can merchant exporters use this notification?

Answer:
Yes.
Merchant exporters are among the primary users of this concessional procurement scheme.

Q8: Is EPC registration compulsory?

Answer:
Yes.
The exporter must be registered with an Export Promotion Council or recognised Commodity Board.

Q9: Are warehouse movements allowed?

Answer:
Yes.
Goods may move to registered warehouse before export, especially where aggregation from multiple suppliers is required.

Q10: What documents are important under this notification?

Answer:
Important documents include:
GST invoice,
shipping bill,
warehouse acknowledgement,
export manifest,
purchase order,
EPC registration proof.

Q11: Why is shipping bill matching important?

Answer:
Because supplier GSTIN and invoice details must appear in shipping documentation.
Mismatch may lead to denial of concession.

Q12: Does this notification apply to services?

Answer:
No.
This notification specifically applies to supply of taxable goods meant for export.

Q13: Is this scheme still practically relevant?

Answer:
Yes.
Even though GST systems have evolved, concessional export procurement remains relevant for working capital management.

Q14: Why are suppliers cautious in such transactions?

Answer:
Because supplier compliance risk exists if exporter fails to meet conditions.
Suppliers therefore carefully verify documentation before offering concessional rate.

Q15: Should exporters seek professional GST support?

Answer:
In many cases, yes.
Export GST compliance involves documentation, timelines, shipping coordination, and invoice matching.
Many businesses prefer professional support through GST Registration Services and export compliance advisory.