After March 1, 2015 our excise authorities told us that a new definition of 'export' has been inserted in Rule 18 and Cenvat Credit Rule 5, which covers only taking goods to a place outside India and so, for supplies to SEZ, rebate will not be available. We started clearing under UT-1 bond but they said that refund of unutilised Cenvat Credit will also not be available. How can we utilise the Credit that we are accumulating?
CBEC has now issued circular no. 1001/8/2015-CX.8 dated April 28, 2015 clarifying that any licit clearances of goods to SEZ from DTA will continue to be export and, therefore, will be entitled to the benefit of rebate under rule 18 of CER, 2002 and of refund of accumulated Cenvat credit under Rule 5 of CCR, 2004, as the case may be.
We refer to your reply (SME Chatroom dated April 21, 2014) stating that conceptually you see no harm in issuing DFIA as per current policy against exports already made, as the essential requirements of the DFIA scheme in the new Foreign Trade Policy are being met. In case of exempted units, issue of DFIA as per current Policy would result in denial of CVD exemption, which was available under the earlier FTP for units that did not avail Cenvat Credit. Can you please explain?
I agree with you. Unfortunately, the new FTP contains no provision to issue DFIA as per old Policy for exports already made. In fact, there is no provision to issue DFIA even as per current Policy for exports made before April 1, 2015. The new FTP requires the exporter to file a DFIA application as per current FTP and then make exports within 12 months and then claim DFIA on post-export basis. Some provision has to be made to help exporters who filed their DFIA applications last year and made exports before April 1, 2015 but DFIA was not issued to them before the new FTP came into effect. Therefore, you may represent the matter to the DGFT, as many more exporters may be facing such a situation.
The said notification allows utilisation of EH and SHE paid on inputs and input services received after March 1, 2015 and balance 50 per cent Credit of EH and SHE paid on capital goods received during 2014-15. It does not deal with utilisation of Credit of EH and SHE on inputs or input services received before March 1, 2015, or balance 50 per cent Credit of EH and SHE paid on capital goods received before April 1, 2014, or EH and SHE paid on capital goods received during 2014-15 in respect of which even the first 50 per cent Credit was not taken. Also, this amendment applies only to manufacturers and not service providers. You may represent to CBEC for amendment to the above notification.
CBEC has now issued circular no. 1001/8/2015-CX.8 dated April 28, 2015 clarifying that any licit clearances of goods to SEZ from DTA will continue to be export and, therefore, will be entitled to the benefit of rebate under rule 18 of CER, 2002 and of refund of accumulated Cenvat credit under Rule 5 of CCR, 2004, as the case may be.
We refer to your reply (SME Chatroom dated April 21, 2014) stating that conceptually you see no harm in issuing DFIA as per current policy against exports already made, as the essential requirements of the DFIA scheme in the new Foreign Trade Policy are being met. In case of exempted units, issue of DFIA as per current Policy would result in denial of CVD exemption, which was available under the earlier FTP for units that did not avail Cenvat Credit. Can you please explain?
I agree with you. Unfortunately, the new FTP contains no provision to issue DFIA as per old Policy for exports already made. In fact, there is no provision to issue DFIA even as per current Policy for exports made before April 1, 2015. The new FTP requires the exporter to file a DFIA application as per current FTP and then make exports within 12 months and then claim DFIA on post-export basis. Some provision has to be made to help exporters who filed their DFIA applications last year and made exports before April 1, 2015 but DFIA was not issued to them before the new FTP came into effect. Therefore, you may represent the matter to the DGFT, as many more exporters may be facing such a situation.
More From This Section
We refer to the notification no.12/015-CE(NT) dated April 30, 2015 allowing Education Cess (EH) and Secondary Higher Education Cess (SHE) to be utilised for payment of excise duty. Please clarify whether we can now utilise all the accumulated EH and SHE towards excise duty payment.
The said notification allows utilisation of EH and SHE paid on inputs and input services received after March 1, 2015 and balance 50 per cent Credit of EH and SHE paid on capital goods received during 2014-15. It does not deal with utilisation of Credit of EH and SHE on inputs or input services received before March 1, 2015, or balance 50 per cent Credit of EH and SHE paid on capital goods received before April 1, 2014, or EH and SHE paid on capital goods received during 2014-15 in respect of which even the first 50 per cent Credit was not taken. Also, this amendment applies only to manufacturers and not service providers. You may represent to CBEC for amendment to the above notification.