ER-2 return for stpi units

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Sorabh Gupta (Querist)
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27 September 2010 We are Software Technology Park registered unit have no local sale and no other manufacturing of other product

Do we need to file ER-2 return required under rule 17 of central excise act 2002

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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27 September 2010 AS PER Notification No.72/ 2003-Central Excise (N.T.)DTD. 15 SEPTEMBER 2003 APPLICABLE FOR YOU.

All assessees have to register with Central Excise authorities. They have to maintain proper production and stock registers. Goods can be removed from factory only under cover of an Invoice. Excise duty has to be paid through PLA or Cenvat credit on monthly basis. Large assessees have to submit monthly return, while SSI units have to submit quarterly returns.

EOU/STP units to file monthly return in form ER-2 – see rule 17(3) of CE Rules

FOR MORE INFO:-http://www.dateyvs.com/cenex05.htm
http://www.cbec.gov.in/excise/cx-act/notfns-2k3/cent72-2k3.htm

http://centralexcisechennai.gov.in/chennai1/trade_notice_1/tradenotice1/trade_notice2003/TN1442003.htm

REGARDS

Sorabh Gupta

Sorabh Gupta (Querist)
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28 September 2010 But we are not producing any excisable product and we are just providing services to overseas clients.As i said we are Software Industry have no only overseas clients and providing services to them and raising bill for man hours plus markup.

In that case i do not think we are required to have excise registration and to file ER-2 return

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2024 If your unit registered under Software Technology Parks of India (STPI) is exclusively engaged in providing services to overseas clients and does not manufacture or sell any excisable goods within India, you are correct in your understanding that you do not need to have excise registration or file ER-2 returns under the Central Excise Act, 1944.

Here’s why:

1. **Nature of Operations**: Your business is primarily service-oriented, providing software services to clients outside India. Services are not considered excisable goods under the Central Excise Act.

2. **STPI Registration**: STPI registration typically exempts units from central excise duties and obligations related to excise registration, provided the activities fall within the scope defined by STPI regulations.

3. **No Local Sale or Manufacturing**: Since you do not have any local sales or manufacturing activities of excisable goods, there is no requirement for excise registration or filing of ER-2 returns. ER-2 returns are specifically for reporting excisable goods manufactured, cleared, or stored.

4. **Service Tax or GST Compliance**: Instead of excise duties, service providers like yours would typically be subject to service tax (under the previous regime) or GST (under the current regime) for services rendered within India. However, these are different tax regimes from central excise.

5. **Compliance Focus**: Your compliance obligations would primarily revolve around STPI regulations, service tax (if applicable), and now GST if your turnover exceeds the threshold for GST registration.

Therefore, based on the information provided and assuming your operations are purely service-based with no excisable goods involved, you do not need to file ER-2 returns or maintain excise registration under the Central Excise Act. It’s advisable to consult with a tax advisor or STPI authority for specific guidance tailored to your situation and to ensure compliance with all relevant regulations.

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