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Merchant export - how to avoid excise duty and cst

06 November 2014

Dear Sir/ Madam,

I have my first export order. I will be buying chemicals from Indian manufacturers/ supplier and send it to African continent.

Please advise how I can avoid the excise duty (12%) and tax (5%) levied by manufacturer or supplier.

Thanks

Ragul

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5 Replies

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 07 November 2014

As this case you are a merchant exporter, you have to take bond with AC/DC/Maritime who is nominated as Bond accepting authority for your juridiction for issuing bond then you can procure CT-1 certificate against that bond. The supplier will raise invoice without payment of duty and tax against that CT-1. For tax exemption you have to Export Invoice and Shippling bill/Billof lading to your tax office. Please see Notn No.42/2001 CE NT dated 26.06.2001 for more procedure.

Regards

RP Ananthakumar

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Ragul K. P. Mohan (Nil) (25 Points)
Replied 07 November 2014

Originally posted by : R P Ananthakumar
	As this case you are a merchant exporter, you have to take bond with AC/DC/Maritime who is nominated as Bond accepting authority for your juridiction for issuing bond then you can procure CT-1 certificate against that bond. The supplier will raise invoice without payment of duty and tax against that CT-1. For tax exemption you have to Export Invoice and Shippling bill/Billof lading to your tax office. Please see Notn No.42/2001 CE NT dated 26.06.2001 for more procedure. Regards RP Ananthakumar

Dear Ananthakumar Sir,

Thanks for your reply.

Sorry, I need some more clarification in this. Here is the case -

I am from TamilNadu. My manufacturers are from Mumbai & Kerala and a supplier is from Chennai.

So if I buy from all three of them, do i have to get three separate bonds from each jurisdiction?

Can i get the bond at the place of export i.e., Chennai?

Thanks, Ragul

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 07 November 2014

Dear Mr. Ragul,

You can issue CT-1 to your supplier if the supplier is a manufacture. The bond will excute either you or your supplier on behalf of you.

Single bond is enough for all the supplier if you will excute or separate bond is required for each supplier if the bond will be raised by your supplier.

Regards,

RP Ananthakuamr

Coimbatore