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Excise Duty on Fertilizers


Dear Friends,

Our Finance Minister has withdrawn the Exemption from Excise Duty on Fertilizers. The duty rate will be 1% if manufacturer does not avail Cenvat on Input and Input Services (Ref:-Notification No.1/2011-CE dated 01/03/2011). The rate will be 5% if manufacturer  avail Cenvat Credit on Input and Input Services.

This is certainly going to increase price of Fertilizers (Ref:- Notification No.2/2011-CE dated 01/03/2011.

 
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Asst. Manager - Taxation

Dear Sir,

On observation of the expemption Notfn 4/2006 dated 01.03.2006 amended through the Notfn. 04/2011 dated 01.03.2011, the exemption is still continue for the products under chapter 31, if they are used in the manufacture of Fertilizers.

How far it is correct that the goods which are used in the manufacture of Fertilizers are exempted, but the products used as Fertilizers are not exempted.

Can the Fertilizer industries expect any further amendment of 4/2006 allowing the exemption for Fertlizers in view of the various agitations against taxability of Fertilizers.

A. Kiran Kumar

 
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Dear Sir,

It is correct that Notfn. No. 4/2006-CE dated 01/03/2006 has been amended vide Notification No. 4/2011-CE dated 01/03/2011 withdrawing Exemption for Ammonium Sulphate being used as Fertlilizer but it has kept exemption for Ammonium Sulphate being used as Input for the manufacture of Fertilizer.

As far as further amendment of Notfn. No.4/2006-CE is concerned, we cannot expect it as the Excise Duty on Fertilizer should have been opposed by the political parties but all of them are silent perhaps because of unawareness.

 
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Excise duty is imposed for Fertilisers falling under Chapter 31 of CE Tariff in this Budget.  The Fertiliser manufacturing Companies have started charging 1.03%  ED for the sales made after 01.03.2011.  My question is whether Fertiliser Mixtures which is a mixture of N.P.K is again subject to E.D payment?  Fertiliser mixtures are packed in 40/50 kgs in HDPE bags/sacks and marketed in a brand name.  We repeat, Fertiliser mixture is nothing but blending of ED paid inputs (NPK) and  is falling under the Tariff Heading 3105. 

 

Can any one answer my query?

 

rengaraj.r.k

 
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glidor@gmail.com


Originally posted by : RENGARAJ

Excise duty is imposed for Fertilisers falling under Chapter 31 of CE Tariff in this Budget.  The Fertiliser manufacturing Companies have started charging 1.03%  ED for the sales made after 01.03.2011.  My question is whether Fertiliser Mixtures which is a mixture of N.P.K is again subject to E.D payment?  Fertiliser mixtures are packed in 40/50 kgs in HDPE bags/sacks and marketed in a brand name.  We repeat, Fertiliser mixture is nothing but blending of ED paid inputs (NPK) and  is falling under the Tariff Heading 3105. 

 

Can any one answer my query?

 

rengaraj.r.k

if you are trader then no excise duty, 

if you are manufacturer then ED liviable after 150 lacs( without input credit)

 
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Thank you Mr U.S Sharma.

The assessee's turnover is more than 150 lacs and is a manufacturer and the end product is nothing but fertiliser mixtures used as Fertilisers meant for agricultural sector. It is not a new product.

 Still i need clarity as the Chapter heading says that the applicability lies on the packing below 10kgs.   Kindly refer 3105 tariff heading. Also refer 4/2011 dt 1.3.11 Notification, which says that exemption is still available???  Kindly reply after referring tariff notes and descripttion and notification.

 

regards,

 

rengaraj r.k

 
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glidor@gmail.com


your product is 3105.20.00

you have escaped the following

1) you have put a brand name ( here all exemptions are void)

2) have you mentioned the name of all three ingradients in invoice? i think no , but u have put a new name for your product

its surely a manufacture under central excise. 

 

exemption notification no 04/11 cite as , not to be used at any stage as fertilizer, does not confirms your product. 

 
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Notification No.4/2006-CE dated 01/03/2006 had given Exemption if item is to be used as Fertilizers OR, as input for Fertilizers.

Now Notification No. 4/2011-CE dated 01/03/2011 has withdrawn the exemption for items to be used as Fertilizers. It means that Exemption is still there if item is to be used as Input for Fertilizers.

You can avail exemption of Duty for your Input not for Final Product which is to be used as Fertilizers. 

 
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Executive Excise


Dear All , Kind attention needed on my querry;

We are clearing our Finished goods to Fertiliser units, without paying Excise duty and mentioning 4/2006 C.E sl.No.32 on Rule 11 Invoice, and mainting seperate inventory equilant to dispatch, we are not taking Input Credit for those invoices.

now my querry is after seeing "Excise duty on Fertilisers" thread;

in this thread you have mentioned 4/2006 is , amended vide Notification No.4/2011-CE dated 01/03/2011 withdrawing Exemption , our product comes under 2807 chapter. kindly clarify?

 
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Asst. Manager - Taxation

Sl.No 32 (for Chapter Heading 28) of Notification No. 4/2006 CE dated 01.03.2006 still unamended, and there no effect of Notification No. 4/2011 dated 01.03.2011. The products of CH-28 still exemepted under 4/2006, you can continue the same.

 

A. Kiran Kumar

 
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