Module 4

Merchanting

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Merchanting Trade (MTT) in India, End to End

Merchanting: 6-month rule

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4.1 One record, two legs

Import leg and export leg sit together, with the trading margin visible.

4.2 AD bank per leg

A same-bank check compares the two.

4.3 Leg-gap countdown

Six calendar months for trades begun on or after 1 Oct 2025; four months for trades begun before that.

4.4 Nine-month completion

Applies only to trades begun before 1 Oct 2026. It is shown as information for later trades.

4.5 Import leg papers

Payment request letter, merchant trade declaration letter and Form A2 with S0108.

4.6 Export leg

Receipt recorded with P0108.

4.7 Closing and reporting

MTT closure request letter, half-yearly default statement, merchant export register.

4.8 Who does what

The AD bank decides and closes.

General information. Confirm with your AD bank or CA.

Do

The training sandbox uses sample records. Nothing you do there reaches a bank, DGFT, ICEGATE or any outside system.

  1. Record a fictitious merchanting trade with both legs and a Bill of Lading reference.
  2. Generate the import-leg payment request letter (S0108), the merchant trade declaration letter and Form A2.
  3. Record the supplier payment and then the export-leg receipt (P0108).
  4. Screenshot the leg-gap countdown. Write one line on which rule applies to your trade's start date.
  5. Generate the MTT closure request letter and open the merchant export register.

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