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triangular trade, Customs - Import - Export - Customs - SEZ

Issue Id: - 116872
Dated: 25-11-2020
triangular trade

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Can you please advise the procedure and documentation for triangular trade for sales overseas?

if there are three parties involved and two are overseas and one is in India( actual supplier), then how it will work.

A gets orders from B and B pays A. A Asks C to supply the material. How will the documentation be done in case C has to supply material directly to B

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1 Dated: 26-11-2020
By:- Spudarjunan S

Dear Hemanshu Segal,

The transaction which you are referring is merchanting trade i.e. goods moving from outside India to a place outside India based upon a supplier in India.

Under GST, it is outside the purview of the same. Refer of Schedule III of CGST Act.

However, for merchanting trade you have refer the RBI guidelines and FEMA for the repatriation, flow of fund and documents.

In case of documentation, in general, A would ask the transporter to supply to B from the place of business of C / the place where delivers to the control of A. If C is directly supplying to B, then there would be exposure to the margin of A to C. These decisions has to be taken by management based upon their strategies and law applicable in such foreign lands.


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