Export of packing material/cartoons
This query is : Resolved
19 February 2014
Dear Sir,
We are manufacturer of packing material. We got an order from USA and on his instructions we send the packing material to a person who manufactures handicraft.Handicraft manufacturer export the handicraft in our packing boxes.In his Bill of entry he only mentions his goods ie handicrafts
Problem: Our packing material are actually exported but we have no proof of export. Since, handicraft is duty free goods and handicraft manufacturer is not registered in excise and hence can not issue any form in this regard.
As a proof of export we have only Form-H which is issued by handicraft manufacturer and receipt in US dollar..
Kindly suggest how can we get the credit of excise duty paid on manufacture of packing material and other export benfits
We are manufacturer of packing material. We got an order from USA and on his instructions we send the packing material to a person who manufactures handicraft.Handicraft manufacturer export the handicraft in our packing boxes.In his Bill of entry he only mentions his goods ie handicrafts
Problem: Our packing material are actually exported but we have no proof of export. Since, handicraft is duty free goods and handicraft manufacturer is not registered in excise and hence can not issue any form in this regard.
As a proof of export we have only Form-H which is issued by handicraft manufacturer and receipt in US dollar..
Kindly suggest how can we get the credit of excise duty paid on manufacture of packing material and other export benfits
23 February 2014
Dear Ms.Radhika,
In my viwe there are the follwoing two ways for your problem of excise duty refund :
1) You charge the excise duty in the bill raised by you for packing material/cartoons and recover the excise duty from the Handicraft manufacturer
2)The handicraft exporter purchases Packing material/cartoons from you he is merchant exporter for the cartoons he may exucute and follow procedures for Form CT-1 procedures under which excise duty proof of export under ARE1 can be on hands.
In my viwe there are the follwoing two ways for your problem of excise duty refund :
1) You charge the excise duty in the bill raised by you for packing material/cartoons and recover the excise duty from the Handicraft manufacturer
2)The handicraft exporter purchases Packing material/cartoons from you he is merchant exporter for the cartoons he may exucute and follow procedures for Form CT-1 procedures under which excise duty proof of export under ARE1 can be on hands.
24 February 2014
Dear Sir,
Thanks for the reply
But both the solutions does not fit in our case.
1.Since Handicraft is not excisable goods and manufacturer is not registered with excise department. So, we can not charge and recover excise duty.
2. Handicraft exporter is not purchasing goods from us. we got the order from US and send the cartoons to Handicraft manufacturer on his (US) instructions, where handicraft manufacturer packed the goods in our cartoons and sent the goods to US.
3. Since Handicraft manufacturer does not purchase goods from us, so he does not mention anything about cartoons in bill of entry
Problem:
Our cartoons are actually been exported but we are not getting any benefits of same, since we do not have any proof of export
Thanks for the reply
But both the solutions does not fit in our case.
1.Since Handicraft is not excisable goods and manufacturer is not registered with excise department. So, we can not charge and recover excise duty.
2. Handicraft exporter is not purchasing goods from us. we got the order from US and send the cartoons to Handicraft manufacturer on his (US) instructions, where handicraft manufacturer packed the goods in our cartoons and sent the goods to US.
3. Since Handicraft manufacturer does not purchase goods from us, so he does not mention anything about cartoons in bill of entry
Problem:
Our cartoons are actually been exported but we are not getting any benefits of same, since we do not have any proof of export
27 February 2014
Dear Radhika,
Tell me how you do you receive export realisation from the USA party from whom you receive order from packing material to suuply to the handicraft exporter. Beause in your transaction i donot see that the 4 corners of a Square does march which otherwise should be in a trasaction.
you receive order from UAS for supply of packing materials to the handicraft manufacturer,you receive Form H from the Handicraft manufacturer ( which means there is asale between you and handicraft manufacturer)if so then how can you sale there is no sale between you both?
Please inform.
Tell me how you do you receive export realisation from the USA party from whom you receive order from packing material to suuply to the handicraft exporter. Beause in your transaction i donot see that the 4 corners of a Square does march which otherwise should be in a trasaction.
you receive order from UAS for supply of packing materials to the handicraft manufacturer,you receive Form H from the Handicraft manufacturer ( which means there is asale between you and handicraft manufacturer)if so then how can you sale there is no sale between you both?
Please inform.
28 February 2014
Dear Sir,
We receive US$ from our client.
We do not sell goods to Handicraft manufacturer, but he issues us Form H so that he can get sales tax exemption and so do we.
We receive US$ from our client.
We do not sell goods to Handicraft manufacturer, but he issues us Form H so that he can get sales tax exemption and so do we.
24 July 2024
Given your situation where you manufacture packing material and export it indirectly through a handicraft manufacturer without a direct sales transaction, obtaining proof of export and claiming export benefits becomes challenging. Here’s how you can approach this issue:
### Proof of Export
1. **Documentation with Handicraft Manufacturer**:
- Even though the handicrafts are mentioned in the bill of entry and your packing material (cartons) are not explicitly mentioned, you can still maintain documentation to establish the linkage. This includes:
- Copies of invoices and packing lists indicating the dispatch of packing material to the handicraft manufacturer.
- Correspondence and order details from the US client specifying the use of your packing material for export purposes.
- Form H issued by the handicraft manufacturer can be supportive, although it primarily pertains to their sales tax exemption, it indirectly acknowledges the use of your packing material for export.
2. **Receipt of US Dollars**:
- Payment received in US dollars from your US client for the export transaction serves as financial proof of export income. This can be crucial during audits and for tax purposes.
### Excise Duty Credit and Export Benefits
1. **Excise Duty Credit**:
- Since your packing material is manufactured and exported, you may be eligible for excise duty credit/refund on the inputs/raw materials used in manufacturing the packing material.
- Compile all invoices, receipts, and proof of excise duty payment on inputs/raw materials.
- Follow the procedure outlined by the Central Excise department for claiming excise duty refund/credit. This usually involves submitting relevant documents to the excise authorities.
2. **Export Benefits**:
- Apart from excise duty, you may also be eligible for other export benefits such as Duty Drawback, GST refund under export scheme, or any other export incentives applicable.
- Ensure you comply with GST regulations regarding exports and claim input tax credit where applicable.
### Practical Steps
1. **Clear Communication**:
- Maintain clear communication with the handicraft manufacturer regarding the export documentation process. Encourage them to acknowledge the use of your packing material in their export shipments, even if informally.
2. **Professional Advice**:
- Seek advice from a tax consultant or customs expert who can provide guidance specific to your situation. They can help navigate the regulatory requirements and optimize your benefits.
3. **Audit Preparation**:
- Keep meticulous records of all transactions, communications, and documents related to the export of packing material. This will facilitate easier audit compliance and substantiation of export claims.
In conclusion, while your case presents unique challenges due to the indirect nature of export through a handicraft manufacturer, proper documentation and adherence to regulatory requirements can help you substantiate export claims and avail benefits such as excise duty credit and export incentives. Working closely with all parties involved and seeking professional advice will be beneficial in navigating these complexities.
### Proof of Export
1. **Documentation with Handicraft Manufacturer**:
- Even though the handicrafts are mentioned in the bill of entry and your packing material (cartons) are not explicitly mentioned, you can still maintain documentation to establish the linkage. This includes:
- Copies of invoices and packing lists indicating the dispatch of packing material to the handicraft manufacturer.
- Correspondence and order details from the US client specifying the use of your packing material for export purposes.
- Form H issued by the handicraft manufacturer can be supportive, although it primarily pertains to their sales tax exemption, it indirectly acknowledges the use of your packing material for export.
2. **Receipt of US Dollars**:
- Payment received in US dollars from your US client for the export transaction serves as financial proof of export income. This can be crucial during audits and for tax purposes.
### Excise Duty Credit and Export Benefits
1. **Excise Duty Credit**:
- Since your packing material is manufactured and exported, you may be eligible for excise duty credit/refund on the inputs/raw materials used in manufacturing the packing material.
- Compile all invoices, receipts, and proof of excise duty payment on inputs/raw materials.
- Follow the procedure outlined by the Central Excise department for claiming excise duty refund/credit. This usually involves submitting relevant documents to the excise authorities.
2. **Export Benefits**:
- Apart from excise duty, you may also be eligible for other export benefits such as Duty Drawback, GST refund under export scheme, or any other export incentives applicable.
- Ensure you comply with GST regulations regarding exports and claim input tax credit where applicable.
### Practical Steps
1. **Clear Communication**:
- Maintain clear communication with the handicraft manufacturer regarding the export documentation process. Encourage them to acknowledge the use of your packing material in their export shipments, even if informally.
2. **Professional Advice**:
- Seek advice from a tax consultant or customs expert who can provide guidance specific to your situation. They can help navigate the regulatory requirements and optimize your benefits.
3. **Audit Preparation**:
- Keep meticulous records of all transactions, communications, and documents related to the export of packing material. This will facilitate easier audit compliance and substantiation of export claims.
In conclusion, while your case presents unique challenges due to the indirect nature of export through a handicraft manufacturer, proper documentation and adherence to regulatory requirements can help you substantiate export claims and avail benefits such as excise duty credit and export incentives. Working closely with all parties involved and seeking professional advice will be beneficial in navigating these complexities.
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