21 December 2011
Dear Sir, We are selling material to customer who has registered under SEZ. and they saying that the excise duty is nil to SEZ units. Whether its correct. Tell me what are the documets to be prepared, Whether we have to intimate our range before dispatch.
26 December 2011
Under Customs Law SEZ notified area is foreign territory. Therefore, supplies made to SEZ are to be considered ‘Export’ & hence, no Excise Duty is payable on the supplies made to SEZ subject to the condition that duly endorsed ARE1 copy comes back to the factory. However, before dispatch to SEZ you need to obtain from them the copy of LOP] Letter of Approval / Permission granted to them by the SEZ authorities, which will help you to understand the validity of the SEZ firm. Further, at the time of dispatch you should prepare ARE1 alongwith NIL duty Invoice. Original, Duplicate and quintuplicate copy of ARE1 should be sent a/w the goods to SEZ. The SEZ customer should send Original and duplicate copy of ARE1 after endorsing them by his SEZ authoriites within 45 days of the sale. Please note if endorsed ARE1 is not received within 45 days, Excise Duty needs to be paid to the Govt.
CAclubindia
