Exporters Ask Govt for Guidelines on Proper Procedures On Cl

Exporters Ask Govt for Guidelines on Proper Procedures On Claims For Rebate On Excise Duty

The pharma exporters in the country have asked the Union finance ministry to issue Guidelines to Central Excise field formations regarding proper procedures to be followed while sanctioning claims for rebate of duty paid on pharmaceutical products for exports. Industry is currently facing serious problems due to the prevalence of two notifications prescribing different rates of duty in respect of pharma products falling under Chapter 30.

While the notification No 04/2006-CE, dated 1.3.2006 prescribes 4 per cent excise duty, another notification No 02/2008-CE, dated 1.3.2008 prescribes 10 per cent excise duty. Both the notifications are independent to each other and are concurrent.

Explaining the problems being faced by the exporters in the country, Indian Drug Manufacturers' Association (IDMA)'s international trade sub-committee chairman D B Mody said that the exporters clear pharma products for home consumption on payment of 4 per cent excise duty in terms of notification No 04/2006-CE, dated 1.3.2006 and they clear export consignments on payment of 10 per cent excise duty in terms of notification No 02/2008-CE, dated 1.3.2008. The Central Excise field formations while sanctioning the rebate claim for exports grants 4 per cent rebate in cash and direct 6 per cent to be credited to Cenvat credit account. This action is not in accordance with the settled legal position.

The industry has asked the finance ministry to clarify whether an exporter having paid excise duty on exported excisable goods is entitled and eligible for rebate in cash of the whole of the duty so paid, whether such duty is paid either by debiting the Cenvat credit or not, even whilst availing benefit of any valid exemption notification whatsoever. Consequently, the rebate sanctioning authority should grant full refund of the duties paid on exported excisable goods in cash.

The industry has also asked the finance ministry to instruct the field formations to drop or abort ongoing proceedings and adjudicate notices already issued on the basis of the above directions only.