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An indirect tax levied on goods manufactured or produced in India for home consumption. Goods subject to excise duty can leave the factory only after the duty on them has been paid. Excise duty exemption is available on inputs as well as finished goods manufactured in India and exported. The exporter may pay the duty initially and seek refund later or seek exemption from payment of duty ab initio.
. Further.Chargeability of Excise Duty Excise duty is payable on movable goods manufactured or produced in India and meant for home consumption. the goods should be included in the schedules to the Central Excise Tariff Act and should be marketable.
the invoice value plus any amount the buyer has to pay on behalf of the seller. Where transaction value cannot be so ascertained. .Valuation for Excise Duty The duty is normally levied on the transaction value of the goods. that is. the valuation has to be done as per the Central Excise Valuation Rules. in a purely business transaction where price is the sole consideration.
.Valuation for Excise Duty In case the goods are subject to MRP (maximum retain price) regulation duty is based on MRP less rebatement. For certain goods valuation is done on the basis of the tariff value fixed under the Act.
Additionally special excise duty is levied on few items included in second schedule to Central Excise Tariff Act. Further. Cenvat (Central Value Added Tax) is levied.Types of Duty On all goods subject to excise. Cess is a tax imposed on specific class of goods for a special purpose. . additional excise duty is levied on certain goods either to curb their consumption or to raise revenue. It may be ad valorem duty or specific rate duty.
This is done by getting a credit for excise paid on inputs.Cenvat Credit Cenvat allows the excise duty paid at the previous stage to be deduced when the duty at the next stage is paid. Generally Cenvat credit is not permitted when the final product is exempt from duty. .
. The excisable goods can be removed from the factory or warehouse only after excise duty is paid.Normal Excise Procedures Producers. dealers and exporters of excisable goods. with annual clearance of at least Rs. The certificate or copy of the certificate of registration should be exhibited in the business premises. 100 lakhs should register with central excise authorities.
Normal Excise Procedures contd The goods can be removed by the manufacturer under invoice system on self removal basis. Monthly report is submitted to Superintendent of Excise. the duty is paid by 5th of next month. Special serially numbered invoices are used for removal. The assessee maintains full record of the goods manufactured and removed. For the goods removed in a month. .
. The exporter can opt for either: export without payment of duty. after payment of the duty. or paying duty on inputs and claiming rebate on export of finished goods. Excise duty on inputs used in the manufacture of finished goods for exports is also exempted. Here too. or export under claim of rebate.Excise Clearance for Exports Export goods are exempt from excise duty. the exporter can opt for: procuring the inputs without paying excise.
He obtains from excise authorities a book of CT-1 certificates. If the exporter is merchant exporter.Export Without Payment of Duty on Finished Goods If the exporter is a manufacturer exporter. . in addition. he furnishes a bond and surety. he furnishes annual letter of undertaking in form UT-1 to the excise authorities to export the removed goods within six months and provide proof of export.
Export Without Payment of Duty on Finished Goods For removing the goods from the factory without payment of duty. and in invoice in triplicate with the legend ³For Export without Payment of Duty´. . The merchant exporter. furnishes one of the CT-1 certificate with Part II completed. the exporter prepares the application in Form ARE1 in quintuplicate. in addition. The amount of duty forgone should be entered in the Daily Stock Account.
. duplicate and quintuplicate copies to the exporter. After inspection the central excise officer will seal each package or container with tamper proof seals.Export Without Payment of Duty on Finished Goods The goods may be removed under the supervision of Central Excise Officer. He endorses the copies of ARE1 and returns the original. The exporter requests the authorities 24 hours in advance.
If the seal is found to be intact. ARE1 original and quintuplicate duly certified are returned to the exporter. the goods are presented to the customs authorities along with three copies of ARE1. . the goods are cleared without opening.Export Without Payment of Duty on Finished Goods At the port.
.Export Without Payment of Duty on Finished Goods The goods may be removed from factory without excise inspection under self sealing by the manufacturer. sends the triplicate and quadruplicate copies to central excise officer within 24 hours. He prepares ARE1 in quintuplicate.
. The goods may be subjected to inspection by customs. who may draw samples to verify. duplicate and quintuplicate copies are submitted along with the goods to the customs at port.Export Without Payment of Duty on Finished Goods Original. If satisfied. the ARE1 form is certified and dealt with as stated earlier.
the exporter should submit a monthly statement along with the originals of ARE1 and self attested copies of bill of lading and shipping bill. If export cannot take place within 6 months.Export Without Payment of Duty on Finished Goods After exports. . as proof. the exporter should deposit duty along with interest within 15 days.
whether manufacturer exporter or merchant exporter. no execution of letter of undertaking or bond or surety is required. can pay the excise duty on export goods initially and claim later rebate of the duty. However. The procedure for removal of goods at the factory or warehouse and clearance at the port of export are the same as described under removal without payment of duty.Export under Claim of Rebate The exporter. .
(b) invoice. and the rebate claimed should not be less than Rs. . 500. should be made to the excise authority declared in form ARE1. After verification. (c) self attested copy of shipping bill and (d) self attested copy of bill of lading. the rebate will be sanctioned within 2 months.Export under Claim of Rebate Within one year of export. application for rebate in the letter head of the export. the market price of goods should not be less than the amount of rebate claimed. For this facility. along with (a) original copy of ARE1.
The manufacturer who wants to acquire inputs free of excise duty should apply to the excise authorities in the prescribed form. and also export the finished goods without excise duty. .Export with Duty Unpaid on Inputs The exporter can acquire as inputs excisable goods without paying duty on them. A copy of the application approved by the excise authorities should be forwarded to the supplier. one application submitted for each supplier. and execute a general bond.
Where satisfied. the excise authorities will grant permission for manufacture and export of finished goods.Export with Duty Unpaid on Inputs On the basis of the application. The manufacturer should file a declaration about the ratio of inputs in the finished goods that were obtained duty free to the output. . the supplier can avail the benefit of exemption notification and supply goods to the manufacturer.
Procedure prescribed for form ARE1 is applicable here also. (b) export is made under obligation under advance authorisation. The facility is not available if (a) duty drawback is availed. . and (d) export is made by merchant exporter. (c) Cenvat credit is availed for inputs.Export with Duty Unpaid on Inputs For removal of finished goods from the factory. the manufacturer should file Form ARE2.
Export under Rebate of Duty in Inputs The exporter can acquire inputs paying duty and claim rebate of duty on the inputs as well as finished goods on export. Normal procedure for procurement of input is followed. The procedure for manufacture is similar to the one prescribed for procuring inputs without payment of duty. .
500. bill of lading and central excises invoices.Export under Rebate of Duty in Inputs The goods are removed under ARE2. Claim application for rebate should be accompanied by original of ARE2 and copies of shipping bill. Minimum eligible rebate is Rs. .
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