Exempted Goods

This query is : Resolved

venkateswarlu. (Querist)
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06 December 2016 We are doing the Business of Laying of Pipeline and Construction of Water Treatment Plant. we need to purchase the goods for water treatment plant. we have exempted from excise duty provided on submission of excise duty certificate from collector or district magistrate as per notification 12/2012. But supplier contention is that they may supply the exempted goods subject to consideration of Rule 6(3) reversal of 6 percent I.e adding of 6 percentage to cost. is it tenable. can we need to reimburse additional 6 percentage? is it tenable when supplier purchasing goods from other vendors and suppling to my company and even if supplier is getting good margin from sub vendors? whether linkage of 12/2012 dates 17.03.12 is with 6(3) is correct?. Please clarify me

CA Suresh Jain

CA Suresh Jain (Expert)
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07 December 2016 So far legality of reversal of CENVAT credit is concerned the manufacturer has to reverse the CENVAT credit as per rule 6(3) where final product is exempted from payment of excise duty.
The adding of 6% in invoice is dependent on your contract with the supplier and your negotiation.