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Excise for exports

Ilyas (Student) (62 Points)

30 December 2015

Dear Sir/ Madam, I am a Exporter from Mumbai. I have purchased materials from Tamil Nadu. Against purchase the seller has given me the proforma invoice including Excise Duty 12.50% & CST 5%. How can i claim set off for ED & CST?

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 30 December 2015

On the basis of invoice (not proforma invoice), you can avail refund of cenvat credit (i.e. ED paid @ 12.5%) proportionately to the total turnover. That is refund = (export turnover/total turnover) x cenvat credit, but subject to the cenvat credit balance available in the books.
For CST, you can claim exemption u/s 5(3) of CST Act (again on the basis of invoice) as penultimate sale of export. Penultimate sale is the last sale/purchase of any goods preceding the sale/purchase causing the export of these goods out of India.
Conditions to be satisfied: (1) There must have been pre-existing agreement/order to sell the specific goods to a foreign buyer (2) Last purchase must have taken place after the such agreement/order (3) Last purchase must have been made for complying with the pre-existing agreement/order (4) Goods purchased & sold by way of export should be same. If the above conditions are satisfied, such sale is exempt from CST.

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 01 January 2016

The excise duty paid can be recouped as drawback or as refund as the taxes are not to be exported. However procurement of goods for export under form H without any CST is preferable.

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 01 January 2016

The excise duty paid can be recouped as drawback or as refund as the taxes are not to be exported. However procurement of goods for export under form H without any CST is preferable.

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