Excise modvat on import

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2014 Dear Sir,

We are a trader of Imported Goods.
And Excise duty paid by us at the time of custom clearance.
The same material Export to Nepal.
Now I want to Know that can we claim for Modvat of Excise. And we are not a Registered under Excise.

kindly advice to me for claim the MODVAT

Arun Kumar Singh

Arun Kumar Singh (Expert)
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04 April 2014 Yes, you can take the refund of duty paid by you.

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2014 Dear sir,
may you tell me how it is possible. and what is the process of refund. I think Firstly we should be registered under Excise.. or not.
kindly advice to me how we start the process for claim.

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Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2014 Dear sir,

we are Trader of Imported Batteries. we are selling in all our India. Now. I want to know that we are falling under Excise area or not. our turnover is 5-6 crore.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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21 July 2024 If you are importing goods into India and paying excise duty at the time of customs clearance, and subsequently exporting these goods to Nepal, here's how the process typically works for claiming MODVAT (Modvat):

### 1. Understanding MODVAT (CENVAT Credit):
MODVAT (Modified Value Added Tax) is now known as CENVAT (Central Value Added Tax) Credit. It allows manufacturers or traders to take credit for the excise duty paid on inputs or capital goods used in manufacturing or processing taxable goods. This credit can be utilized for payment of excise duty on final products or can be claimed as a refund under certain conditions.

### 2. Eligibility to Claim CENVAT Credit:
- **Registered Under Excise:** Normally, to claim CENVAT credit, you need to be registered under the Central Excise Act, 1944. Since you mentioned you are not registered under excise, this could be a limitation.
- **Input Services:** For traders like you, credit can also be claimed on input services such as clearing and forwarding services related to imported goods.
- **Export of Goods:** Exporters can claim a refund of accumulated credit under the provisions of the Central Excise Rules, 2002.

### 3. Process to Claim CENVAT Credit or Refund:
Since you are not registered under excise, you typically cannot claim CENVAT credit directly. However, if you are exporting goods and have paid excise duty on inputs, you can consider the following steps:

- **Register for Excise:** To claim CENVAT credit, you would need to register under the Central Excise Act. This registration allows you to accumulate credit on excise duty paid on inputs.
- **Export Procedures:** Ensure that your exports are in compliance with customs procedures. Export the goods under relevant export documentation.
- **Refund Process:** After exporting the goods, you can apply for a refund of the excise duty paid on inputs used in the exported goods under Rule 18 of the Central Excise Rules, 2002. The refund application must be submitted within the prescribed time frame along with supporting documents.

### 4. Excise Area and Your Business:
Considering your turnover of 5-6 crore and the nature of your business as a trader of imported batteries, you may need to evaluate whether your activities fall under the ambit of excise duties. Generally, excise duty is levied on manufacturing or production of goods within India. Since you are importing and then exporting without further manufacturing or processing in India, your liability under excise duty may be limited to the import stage unless you are involved in any domestic manufacturing or assembly.

### Conclusion:
To summarize, as a trader of imported goods, your ability to claim CENVAT credit is limited unless you register under excise. For exports, you can explore claiming a refund of excise duty paid on inputs used in the exported goods. It's advisable to consult with a tax advisor or a legal expert specializing in excise and customs regulations to determine the exact requirements and procedures applicable to your specific situation. They can guide you through the registration process and refund procedures effectively.