Procurement of goods without excise duty

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CA Arun Kumar (Querist)
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12 December 2015 Dear Experts,
Need your help on one query,
We need to procure raw material without payment of excise duty. We will manufacture final product which we will export to other country.
I want to understand what forms should we apply for in excise so that we are not charged any excise duty by the supplier of raw material? will it be CT-1, if yes then do we need to issue ARE1 or will it be issued by supplier in quad duplicate copies. Please help and revert so that we can avail benefits.

Arun Kumar Singh

Arun Kumar Singh (Expert)
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13 December 2015 Before procurement of goods you need to fixation of input output norm for the final products before the excise department then you can procure the gods without payment of duty for export of goods.

CA Arun Kumar

CA Arun Kumar (Querist)
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13 December 2015 Sir,

We will be buying MS plates to fabricate heat exchangers. Scrap would be minimal.

So can you guide me what should we do to procure goods without payment of excise duty? means what will be the procedure.

Thanks & Regards
Arun Kumar

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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10 August 2024 To procure raw materials without payment of excise duty for manufacturing products intended for export, you need to follow a specific procedure under the Excise Duty regulations. Here's a detailed guide on the process:

### **1. Understanding the Forms and Procedures**

#### **1.1. Form CT-1 (Certificate of Excise Duty Exemption)**
- **Purpose**: Form CT-1 is used for procuring goods without payment of excise duty under the exemption provisions for goods intended for export.
- **Application**: You need to apply to the Central Excise Department for the issuance of Form CT-1. This form is given to the manufacturer for procurement of goods duty-free.
- **Submission**: Submit a request to the Central Excise office in your area along with necessary documents such as a copy of the Excise Registration Certificate and details of the raw materials and their intended use.

#### **1.2. ARE-1 (Application for Removal of Goods for Export)**
- **Purpose**: ARE-1 is a declaration form used when goods are removed from the factory for export.
- **Issuance**: ARE-1 is issued by the manufacturer (supplier) to the exporter, indicating that the goods are being removed for export.
- **Requirement**: As the buyer, you generally don’t issue ARE-1; instead, it is issued by the supplier of the raw materials. However, you must ensure that the supplier provides you with this form for your records.

### **2. Procedure to Procure Goods Without Payment of Excise Duty**

#### **2.1. Application for Form CT-1**
1. **Application to Excise Department**: Apply to the Central Excise Department for Form CT-1. Provide details of your manufacturing process and export plans.
2. **Documents Required**:
- Application form for CT-1.
- Copy of your Central Excise Registration Certificate.
- Details of the raw materials and their intended use.
- Any other documents required by the local Central Excise office.

#### **2.2. Obtain Form CT-1**
1. **Issuance of Form CT-1**: After approval, the Central Excise Department will issue Form CT-1. This form allows you to procure raw materials without excise duty.
2. **Distribution**: Provide this form to your suppliers as evidence that you are eligible for duty-free procurement.

#### **2.3. Supplier’s Responsibility**
1. **Issuance of ARE-1**: The supplier of the raw materials will issue ARE-1 when they dispatch the goods to you. This form is required to ensure that the goods are intended for export.
2. **Compliance**: Ensure that your supplier issues the ARE-1 form correctly and retains copies for their records.

### **3. Other Considerations**

#### **3.1. Maintain Records**
- Keep detailed records of Form CT-1 and ARE-1 for auditing and compliance purposes.
- Maintain proper documentation of all transactions related to the procurement and export of goods.

#### **3.2. Follow Up**
- Regularly follow up with the Central Excise Department to ensure that all forms and processes are correctly handled.
- Verify that your supplier adheres to the regulations and provides the necessary forms for export.

### **4. Summary of Key Steps**

1. **Apply for Form CT-1** from the Central Excise Department.
2. **Obtain Form CT-1** and provide it to your suppliers.
3. **Ensure Suppliers Issue ARE-1** for goods removed for export.
4. **Maintain Records** of all forms and transactions.

By following these steps, you can procure raw materials without excise duty and ensure compliance with the regulations for exporting finished products.