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Merchanting Trade Transaction recently seen in news refers to
- a)a transaction between an Indian company and its subsidiary company within India.
- b)a transaction involving shipment of goods from one foreign country to another foreign country through an Indian intermediary.
- c)transaction made by merchant with the bank using special internet banking facility.
- d)a transaction between an Indian company and its subsidiary company outside India.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Merchanting Trade Transaction recently seen in news refers toa)a trans...
- In the Indian context, a transaction is called Merchanting Trade Transaction when,
(i) The supplier of goods will be resident in one foreign country
(ii) The buyer of goods will be resident in another foreign country
(iii) The merchant or the intermediary will be resident in India In simple terms, a Merchanting trade transaction is one that involves the shipment of goods from one foreign country to another foreign country involving an Indian Intermediary. Hence, it is also called Intermediary Trade. Hence, option (b) is the correct answer. - For a trade to be classified as merchanting trade following conditions should be satisfied ;(i) Goods acquired should not enter the Domestic Tariff Area of the Importing Country and o The state of the goods should not undergo any transformation and mean for transport from the country of the supplier to the country of the buyer.
- Goods involved in the merchanting trade transactions would be the ones that are permitted for exports/imports under the prevailing Foreign Trade Policy (FTP) of India, as on the date of shipment and all the rules, regulations and directions applicable to exports (except Export Declaration Form) and imports (except Bill of Entry), are complied with for the export leg and import leg respectively.
- Recently, the Gujarat-Bench of Authority for advance ruling (AAR) has ruled that GST is payable on goods sold to a customer located outside India, where goods are shipped directly from the vendor’s premises (located outside India) to the customer’s premises. The AAR verdict means that GST would be levied on MTT where the applicant will receive an order from the customer located outside India and as per their instruction, the vendor would directly ship the goods to a customer located outside India.
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Merchanting Trade Transaction recently seen in news refers toa)a trans...
Merchanting Trade Transaction refers to a transaction involving shipment of goods from one foreign country to another foreign country through an Indian intermediary. Let's understand this in detail:
Explanation:
When a merchant in India receives an order from a foreign buyer, they can choose to fulfill the order by buying the goods from a supplier in another foreign country and then selling them directly to the buyer. This is known as a Merchanting Trade Transaction.
Features of Merchanting Trade Transaction:
1. In this type of transaction, the goods never enter India. They are shipped directly from one foreign country to another foreign country.
2. The Indian merchant acts as an intermediary between the supplier and the buyer. They do not take ownership of the goods at any point during the transaction.
3. The merchant earns a profit by charging a markup on the price they paid to the supplier.
4. This type of transaction is typically used for high-value goods such as machinery, equipment, and raw materials.
Significance of Merchanting Trade Transaction:
1. This type of transaction helps Indian merchants to earn foreign currency by acting as intermediaries in international trade.
2. It also promotes India's role as a hub for international trade.
3. It provides an opportunity for Indian merchants to earn a profit without taking on the risks associated with ownership of the goods.
Conclusion:
Merchanting Trade Transactions are an important component of India's international trade. They provide an opportunity for Indian merchants to earn foreign currency and promote India's role as a hub for international trade.
Explanation:
When a merchant in India receives an order from a foreign buyer, they can choose to fulfill the order by buying the goods from a supplier in another foreign country and then selling them directly to the buyer. This is known as a Merchanting Trade Transaction.
Features of Merchanting Trade Transaction:
1. In this type of transaction, the goods never enter India. They are shipped directly from one foreign country to another foreign country.
2. The Indian merchant acts as an intermediary between the supplier and the buyer. They do not take ownership of the goods at any point during the transaction.
3. The merchant earns a profit by charging a markup on the price they paid to the supplier.
4. This type of transaction is typically used for high-value goods such as machinery, equipment, and raw materials.
Significance of Merchanting Trade Transaction:
1. This type of transaction helps Indian merchants to earn foreign currency by acting as intermediaries in international trade.
2. It also promotes India's role as a hub for international trade.
3. It provides an opportunity for Indian merchants to earn a profit without taking on the risks associated with ownership of the goods.
Conclusion:
Merchanting Trade Transactions are an important component of India's international trade. They provide an opportunity for Indian merchants to earn foreign currency and promote India's role as a hub for international trade.
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Merchanting Trade Transaction recently seen in news refers toa)a transaction between an Indian company and its subsidiary company within India.b)a transaction involving shipment of goods from one foreign country to another foreign country through an Indian intermediary.c)transaction made by merchant with the bank using special internet banking facility.d)a transaction between an Indian company and its subsidiary company outside India.Correct answer is option 'B'. Can you explain this answer?
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Merchanting Trade Transaction recently seen in news refers toa)a transaction between an Indian company and its subsidiary company within India.b)a transaction involving shipment of goods from one foreign country to another foreign country through an Indian intermediary.c)transaction made by merchant with the bank using special internet banking facility.d)a transaction between an Indian company and its subsidiary company outside India.Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Merchanting Trade Transaction recently seen in news refers toa)a transaction between an Indian company and its subsidiary company within India.b)a transaction involving shipment of goods from one foreign country to another foreign country through an Indian intermediary.c)transaction made by merchant with the bank using special internet banking facility.d)a transaction between an Indian company and its subsidiary company outside India.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Merchanting Trade Transaction recently seen in news refers toa)a transaction between an Indian company and its subsidiary company within India.b)a transaction involving shipment of goods from one foreign country to another foreign country through an Indian intermediary.c)transaction made by merchant with the bank using special internet banking facility.d)a transaction between an Indian company and its subsidiary company outside India.Correct answer is option 'B'. Can you explain this answer?.
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