EXPORT PROCEDURES AND BENEFITS - Central Excise Practice Manual (OLD) - Central Excise

11. EXPORT PROCEDURES AND BENEFITS In principle, exports should be relieved of all types of duties and taxes. With a view to facilitate the manufacturers of India to effectively compete in the International market, various export benefit schemes have been prescribed under the Central Excise Law. A few important schemes providing benefit for the Exports and the related procedures are as discussed below: 11.1 Rebate of Excise duty paid on the export goods and the materials used in the manufacture of such goods: Where any excisable goods are exported on payment of duty, the duty paid on such export goods and the material used in the manufacture of such export goods would be granted as Rebate under Rule 18. The conditions and procedures for grant of rebate of duty are prescribed in the Notifications issued under Rule 18 read with Chapter 8 of CBEC's Supplementary Instructions. 11.2 Export of goods without payment of duty under Bond: The excisable goods can be exported without payment of duty under bond from the factory or warehouse or any other premises as may be approved by the Commissioner in terms of Rule 19. This facility of export under bond is also available for export to Nepal and Bhutan, if payment for the same is made in freely convertible currency. The goods manufactured from the inputs obtained under bond should be exported only under bond and not under the rebate procedure. The conditions, safeguards and procedures for export under Bond are prescribed in the Notifications issued under Rule 19 read with Chapter 7 of CBEC's Supplementary Instructions. 11.3 Procedures for Export of goods without payment of duty: The exporter intending to avail the facility to export the goods without payment of duty shall furnish a bond in Form B-1 on a non-judicial stamp paper of appropriate value (as applicable in the State in which the bond is being furnished). The manufacturer exporter may furnish Letter of Undertaking (LUT) in Form UT-1 in lieu of the bond, which is valid for one year. Where the export is effected by the Merchant-Exporter, bond has to be necessarily furnished and clearances will not be allowed based on the LUT of the manufacturer. It is, however, open for the manufacturer to furnish the bond on behalf of the Merchant-exporter in such cases. Exporters are required to furnish surety equal to full bond amount or security equal to 25% of the bond amount. Security/surety is not required to be furnished by the Super Star Trading Houses, Star Trading Houses, Trading Houses, Export Houses and Merchant Exporters registered with recognized Export Promotion Councils provided they have not come to adverse notice of the Department in the past 3 years. The goods shall be exported under A.R.E-1 document prepared in quintuplicate (5 copies) within 6 months from the date on which the same were cleared for export from the factory or within the extended period as may be granted by the jurisdictional Asst. /Deputy Commissioner or Maritime Commissioner. 11.4 Refund of Cenvat credit of duty paid on inputs used in the manufacture of goods exported under bond: Where the end-product is exported under bond, the Cenvat credit taken on the inputs used in the manufacture of the export goods can be claimed as refund, if the manufacturer is unable to use the credit for payment of duty on similar final products cleared for home consumption or for export on payment of duty or Service tax on output service. The conditions and procedures for claiming such refund are prescribed in Notification No. 5/2006 CE (NT) dated 14-3-2006 as amended, issued under Rule 5 of the Cenvat Credit Rules, 2004. 11.5 Simplified Export procedure for exempted Units: Small scale Units, which are availing full exemption from payment of duty under a Notification based on the value of clearances, are exempted from filing the export document in ARE-1 and execution of Bond so long they remain within the threshold limit of full exemption. Simplified export procedure is prescribed in Chapter 7 of CBEC's Supplementary Instructions.