| We are a 100 per cent Export Oriented Unit (EOU) registered with STPI and we do not have any DTA sales. We do not intend to claim any Service Tax set-offs/credits for payments made by us. In this context. (1) is it compulsory for us to register with Service Tax department or is it optional? (2) Do we have any export promotion benefits eligible for us (other than 10A benefit under IT Act). We haven't claimed any benefits so far. |
| Even though you are not a service provider and you do not want to take any benefits or Cenvat credit, you may still be required to discharge service tax liability as service recipient in respect of certain services. For example, you may be discharging service tax liability in respect of inward freight or in respect of any services received from abroad. You must get yourself registered with the service tax department and discharge the tax liability if you are a person liable to pay service tax. Regarding other benefits as Export Oriented Unit, you may please refer to Chapter 6 of the Foreign Trade Policy. |
| Our customer who is merchant exporter had executed a bond and provided us CT1 along with his ARE1. His ARE1 is prepared based on our proforma invoice (prices at which we sell to him) and after receiving filled ARE1 we have joint signed the same. Our customer (merchant exporter) has not provided us his export invoice and packing list saying that he will send the same directly to freight forwarder at customs. For examination at our premised by Central Excise officials, we have furnished our excise invoice showing nil excise duty against CT1 and our merchant exporter's ARE1. Our excise inspector while examination asked for merchant exporter's export invoice saying that Export Invoice is an integral part of ARE1 and prices that needs to be mentioned in ARE1 are based on merchant trader's export value. Please clarify the correct position. |
| The Central Board of Excise and Customs (CBEC) Circular No. 203/37/96-CX, dated 26-4-1996 [From F. No. 209/11/96-CX.6] says that it is not necessary that the AR4 value and the Free on Board Value (FOB) should be the same because the AR4 Value should be determined under section 4 of the Central Excises & Salt Act and the same should be declared on the invoices issued under Rule 52A. Free on Board value which is contracted price in the course of international trade should normally correspond to Section 14 of the Customs Act, 1962 and this value may be more or even less than the AR4 value. |
| The same circular categorically states that it is the assessable value determined under Section 4 of the Central Excises & Salt Act, which is required to be mentioned on AR4 and the corresponding invoice issued under Rule 52A. This 'Value' is relevant for the purposes of Rule 12 & Rule 13 of Central Excise Rules, 1944. Free on Board Value is relevant for Customs purposes and other schemes like drawback, exports under DEEC etc. Please guide your inspector suitably. |
| Business Standard invites readers' SME queries related to excise, VAT and exim policy. You can write to us at smechat@business-standard.com |
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