Sez- excise duty implications

Both the option holds good. any one u can use.

DTA units selling goods to SEZ units are eligible for exemption from excise duty under Notification No. 58/2003 .

 Consignments from domestic area to customs bound special economic zones (SEZs) should be treated as exports, thus becoming eligible for duty rebates as applicable to offshore shipments. SEZ is exempt from Central Excise, therefore SEZ can't claim any refund so that you should supply with claim of rebate under Rule 18.

Dear Sunil sir, exemption (Under 58/2003)

        & rebate are same or differ???????????????

Exemption is granted to SEZ from Central Excise, that means DTA unit can supply without payment of duty as per Notification No. 58/2003. So there is three option.

1) Supply to SEZ without payment of duty (prefer when there is no accumalated CENVAT Credit)

2) Supply to SEZ with payment of duty and recover the duty under Rule 18 as rebate.( Prefer if there is accumalated CENVAT Credit)

3) Supply to SEZ without payment of duty and claim rebate of central excise duty on input material used for manufacture of final product. 

Notification No. 58/2003 and rebate are different.

Hi,

Supplies to SEZ are exempted from payment of duty under CT3.

The procedure is to get the CT3 Bond from the purchaser who is located in SEZ and file the same with the range office of the supplier, and based on this,  the goods could be cleared w/o payment of duty.

All clearances to SEZ/EOU/STPI/EHTP are treated as deemed export for the DTA unit.

Supplies to SEZ is not convered under CT3, but Supply to EOU unit is covered under CT3. Supply to SEZ is treated as par with Export. Therefore all procedure related to export are related to SEZ.

Hi Sunil,

The term SEZ which stands for Special economic zones in which the various units like EOU/EHTP/STPI are located which mainly process goods and services for export.

Please correct me if wrong.

Hi Natraj, EOU units can set up any place in India, and any existing or new units can be convert in to EOU. EOU units are bound by Central Excise Act but SEZ are exempted from Central Excise. SEZ units can be set up only in Notified area only. 

Hi,

Thanks for the clarification.

All units started exclusively for the purpose of Export are exempted from Excise duty on local purchases and customs duty on imported purchases. (on the condition of achieving NEFP)

This is done by giving B-17 bondalong with requisite BG (5% of the bond value) for the duty forgone by the Customs department on imports (CG & RM).

But for the local purchases, to get exemption from levy of excise duty by the vendor, a CT3 bond is issued by the purchasing unit. (for both CG & RM)

Since in all these units for export (EOU,EHTP,STPI) there is no provision for refund of duty (either by way of rebate of duty under rule 18 or duty refund under rule 5) as the conditions laid down in these rule cannot be implemented.

However all the inputs purchased (CG & RM) need to be bonded under the seal of the C.Ex range office.

Please hilight me on any other provisions.

Tks

hi sunil sir,

Please tell me the use of AR-E1 and AR-E3 ? How do these differ in their use?

ARE- 1 - Application for Removal Of Goods for Exports: This form is used for removal of goods directly from Factory or warehouse to Customs place. This form can use export under bond/LUT or with payment of duty and claim Rebate under Rule 18.

ARE-3 This form is used for re-warehousing. Can use for Stock movement for export purpose from Factory to Warehouse or warehous to warehouse on the basis of CT2. 

Goods Supplied to EOU units also on the basis of ARE-3 under CT3.

Thanks Sunil

Dear sunil sir,

Can a maufacturer can procure raw materials without paying excise duty under notification no 43/2001 which are used in the final product for supply to an SEZ?