Is trader/dealer can sell an excisable product to SEZ unit?
This query is : Resolved
18 September 2009
Hi! Friends,
Here is a question all of you.
An excise dealer (also trades without passing cenvat) can purchase a product by paying excise duty from a manufacturer. Can he sell the product to a SEZ customer without issuing a excise invoice? (issues only commercial invoice without mentioning excise).
And the customer also requested to issue the product by sealing with unique identity (invoice/delivery challan/note) and delivers the product at the customer place. Is it possible to do like that or not?
Possible reasons/workouts please.
Thanks to one and all.
Here is a question all of you.
An excise dealer (also trades without passing cenvat) can purchase a product by paying excise duty from a manufacturer. Can he sell the product to a SEZ customer without issuing a excise invoice? (issues only commercial invoice without mentioning excise).
And the customer also requested to issue the product by sealing with unique identity (invoice/delivery challan/note) and delivers the product at the customer place. Is it possible to do like that or not?
Possible reasons/workouts please.
Thanks to one and all.
22 September 2009
You can supply with out passing the excise.
But you should not take cenvat credit or if you have taken credit you have to pay the same.
But you should not take cenvat credit or if you have taken credit you have to pay the same.
22 September 2009
What is the procedure at SEZ unit, if we issue cenvat invoice to SEZ customer?
03 October 2009
SEZ unit can go for a refund as it is entitled to get the materials w/o payment of CE.
04 October 2009
If we pass on the cenvat to SEZ unit, shall we get the same back
01 August 2024
In India, the treatment of CENVAT (Central Value Added Tax) credit when dealing with SEZ (Special Economic Zone) units is governed by specific rules and regulations. Here’s a detailed explanation of how it works:
### **1. CENVAT Credit and SEZ Units**
**A. General Principle:**
- **CENVAT Credit:** Generally, CENVAT credit is available on inputs, input services, and capital goods used in the manufacture of goods or providing of services.
- **SEZ Units:** SEZ units are considered as a separate territory for the purpose of indirect taxation. Supplies to SEZ units are treated as "zero-rated supplies" under the GST regime (and similar principles applied under the erstwhile CENVAT Credit Rules).
**B. Treatment Under GST (Goods and Services Tax):**
- **Zero-Rated Supply:** Under GST, supplies made to SEZ units are considered zero-rated. This means that the supplier does not charge GST on these supplies but can claim a refund of the input tax credit (ITC) used in the making of those supplies.
- **Refund of ITC:** If you supply goods or services to a SEZ unit, you should not charge GST on the invoice. Instead, you can claim a refund of the ITC related to the supply. The process involves filing a refund claim under the GST laws.
**C. CENVAT Credit Under Pre-GST Regime:**
- **CENVAT Credit on Exports:** Before the implementation of GST, if you passed on CENVAT credit (such as on inputs and input services) to a SEZ unit, it would be similar to treating it as a zero-rated supply for which you could claim a refund of the CENVAT credit.
- **Refund Mechanism:** You need to follow a specific process to claim a refund of the CENVAT credit, including filing a claim with the relevant authorities and providing necessary documentation.
### **2. Steps to Follow:**
**A. For GST Regime:**
1. **Invoice Without GST:** Issue invoices to the SEZ unit without charging GST.
2. **Claim Refund:** File a refund application for the ITC accumulated on inputs, input services, or capital goods used in making the zero-rated supplies. This can be done through the GST portal.
**B. For Pre-GST Regime (CENVAT Credit):**
1. **Issue Invoice:** Ensure that your invoices to the SEZ unit comply with the rules regarding zero-rated supplies.
2. **File Refund Application:** Submit a refund application for the CENVAT credit utilized in the production of goods or services supplied to the SEZ unit. The application should be filed with the relevant Central Excise authorities.
### **3. Documentation and Compliance:**
- **Maintain Records:** Keep detailed records of all transactions, invoices, and correspondence related to the supply to the SEZ unit.
- **Documentation:** Ensure that all required documentation, including the proof of zero-rated supply and evidence of CENVAT credit utilization, is available to support your refund claim.
### **4. Conclusion:**
Yes, you can get back the CENVAT credit or input tax credit when you pass it on to a SEZ unit, provided you follow the prescribed refund process and ensure compliance with the applicable rules and regulations.
For the most accurate and up-to-date guidance, always refer to the latest notifications from the CBEC (Central Board of Excise and Customs) or consult with a tax professional familiar with indirect tax regulations.
### **1. CENVAT Credit and SEZ Units**
**A. General Principle:**
- **CENVAT Credit:** Generally, CENVAT credit is available on inputs, input services, and capital goods used in the manufacture of goods or providing of services.
- **SEZ Units:** SEZ units are considered as a separate territory for the purpose of indirect taxation. Supplies to SEZ units are treated as "zero-rated supplies" under the GST regime (and similar principles applied under the erstwhile CENVAT Credit Rules).
**B. Treatment Under GST (Goods and Services Tax):**
- **Zero-Rated Supply:** Under GST, supplies made to SEZ units are considered zero-rated. This means that the supplier does not charge GST on these supplies but can claim a refund of the input tax credit (ITC) used in the making of those supplies.
- **Refund of ITC:** If you supply goods or services to a SEZ unit, you should not charge GST on the invoice. Instead, you can claim a refund of the ITC related to the supply. The process involves filing a refund claim under the GST laws.
**C. CENVAT Credit Under Pre-GST Regime:**
- **CENVAT Credit on Exports:** Before the implementation of GST, if you passed on CENVAT credit (such as on inputs and input services) to a SEZ unit, it would be similar to treating it as a zero-rated supply for which you could claim a refund of the CENVAT credit.
- **Refund Mechanism:** You need to follow a specific process to claim a refund of the CENVAT credit, including filing a claim with the relevant authorities and providing necessary documentation.
### **2. Steps to Follow:**
**A. For GST Regime:**
1. **Invoice Without GST:** Issue invoices to the SEZ unit without charging GST.
2. **Claim Refund:** File a refund application for the ITC accumulated on inputs, input services, or capital goods used in making the zero-rated supplies. This can be done through the GST portal.
**B. For Pre-GST Regime (CENVAT Credit):**
1. **Issue Invoice:** Ensure that your invoices to the SEZ unit comply with the rules regarding zero-rated supplies.
2. **File Refund Application:** Submit a refund application for the CENVAT credit utilized in the production of goods or services supplied to the SEZ unit. The application should be filed with the relevant Central Excise authorities.
### **3. Documentation and Compliance:**
- **Maintain Records:** Keep detailed records of all transactions, invoices, and correspondence related to the supply to the SEZ unit.
- **Documentation:** Ensure that all required documentation, including the proof of zero-rated supply and evidence of CENVAT credit utilization, is available to support your refund claim.
### **4. Conclusion:**
Yes, you can get back the CENVAT credit or input tax credit when you pass it on to a SEZ unit, provided you follow the prescribed refund process and ensure compliance with the applicable rules and regulations.
For the most accurate and up-to-date guidance, always refer to the latest notifications from the CBEC (Central Board of Excise and Customs) or consult with a tax professional familiar with indirect tax regulations.
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