Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Merchant exporter

Ram kr. (Buisness) (883 Points)

23 August 2012

DEAR EXPERT,

WE ARE MANUFACTURER EXPORTER NOW WE WANT TO BECOME A MERCHANT EXPORTER. PL. TELL PROCEDURE.

THANKS

Reply
Follow
Share

16 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 24 August 2012

1) get B-1 Bond executed from the division of the manufacturer / maritime commissioner,

2) obtain CT-1 for the duty amount involved

3) offer ARE-1, CT-1 to manufacturer,

4) get the inspection and sealling of export cargo done by the excise superintendent of factory range, he will handover the original / duplicate and 5th copy of ARE1 to be presented to customs

5) manufacturer will clear goods on the strength of CT-1 on export invoice and ARE1 without payment of duty.

6) after export , submit the original , duplicate copies of ARE1 to bond authority for release of bond, with proof of export.,

Upgrade to CAclubindia Pro. Subscribe Now!

Ram kr. (Buisness) (883 Points)
Replied 24 August 2012

Can a Merchant Exporter cleared the goods in own godown in replace of Manufacturer. If yes then what will be the ARE-1 procedure.

Thanks

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 25 August 2012

if merchant exporter takes the goods to his own godown then who will execute the ARE-1? coz the manufacturer will issue the goods as home consumption, and not for export without duty under CT-1,

if he has to clear under CT-1 then goods should be cleared from manufacturer factory only.

Ram kr. (Buisness) (883 Points)
Replied 25 August 2012

We are Manufacturer Exporter as wel as Merchant Exporter. If merchant exporter takes the goods to his own godown without ct-1 then who will execute the ARE-1 and what will be the procedure. Pl see attached circular no. 952/13/2011-cx and advice.

Thanks

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 25 August 2012

Merchant Exporter is the person who is not a manufacturer of the goods to be exported.

if the manufacturer sends goods to its own registered godown, then manufacturer is entitled to execute the inspection and sealing ( for free shipping bills)........read clause 3 of the said notification. the benefit is restricted to self produced goods from factory of removal or excise registered warehouse of manufacturer of the goods only.

---------------------------------------------------------------------------------------------------------------------

I request you to post the query in complete in the forrum, as piecemeal queries get incomplete replies, assuming that the query holder is well familier with the balance rules and formalities,

Upgrade to CAclubindia Pro. Subscribe Now!

Ram kr. (Buisness) (883 Points)
Replied 25 August 2012

Sir,

Actualy our company is manufacturer exporter and want to be export trading goods through factory stuffing. My query is

1. Will our company raise trading invoice with ARE-1 through Factory stuffing. What kind of procedure for export trading goods throught Factory stuffing.

Thanks

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 25 August 2012

for trading goods ? are your registered as trader ?

i assume you are going to export your inputs as brought in condition,

you factory will be place of removal and you have to use your excise invoice which is used for clearance of your own products,

ARE-1 is to be executed by yourself but self sealing is not permitted, as the goods are getting exit from RG-23A part 1, and not from RG-1,

if you shift the inputs to your godown then you have to reverse the ED , which was taken credit at the time of bringing in, and hence goods at godown can not be duty free, neither it can be exported with duty , nor it can be exported under rebate claim.

so yse your own factory for inspection/stuffing/sealing under supervision of range officer of your own factory. and execute the export clearance.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 26 August 2012

trading goods, means goods which you have brought you in capacity as a trader for not to be used in manufacture and in capctity of a excise registered trader.

Ram kr. (Buisness) (883 Points)
Replied 26 August 2012

As per your view

ARE-1 is to be executed by yourself but self sealing is not permitted, as the goods are getting exit from RG-23A part 1, and not from RG-1,

Can as a Merchant Exporter we should go to for self sealing/Factory Stuffing from in own premises not in Manufacturer Premises.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 26 August 2012

Originally posted by : Ram kr.
	As per your view ARE-1 is to be executed by yourself but self sealing is not permitted, as the goods are getting exit from RG-23A part 1, and not from RG-1, Can as a Merchant Exporter we should go to for self sealing/Factory Stuffing from in own premises not in Manufacturer Premises.

Before putting any reply, i want to know some more facts..............

1) CT-1 is exceuted by yourself or by any 3rd party exporter?

2) Inputs are brought in factory of manufacture and are natural inputs alike other inputs which are used in factory of production for manufacture, and are not similer to final taxable products , pls specify.........

3) at the time of clearance, such inputs are cleared seperately or alongwith the taxable final products of the factory of manufacure?

4) any export incentive , like DEPB/advance licence is to be claimed or not?

5) such inputs are brought into your factory from ................. direct from manufacturer or 1st stage dealer or 2nd stage dealer, and input credit has been availed or not?

6) what is status of factory of manufacturer, availing cenvat credit and paying duty from zero level ? or availing benefit of value based or quantity based exemption?

----------------------------------------------------------------------------------------------------------------------------------------

a) self sealing is a systemic procedure where the manufacuter exporter is granted the power to supervise the export consignment, manufactured by self and exported by self under UT-1( B-1 Bond and CT-1 is also not mandatory for manufacturer exporter in this case), as the records are submitted to department at the end of month through ER-1 for manufacture and export, also the 3rd and 4th copies of ARE-1 within 24 hrs of export, department belives the declaration of the manufacturer exporter factory is true and hence the benefit is available for them.

b) in case other than above, if goods are cleared from RG23A-Part1, there is no return of goods received and exported or utilized, so who will submit such document to department regarding such input clearance as export?

c) at the time of execution of B-1, the format involves the chapter headings of the goods to be cleared under such B-1 Bond ( under UT-1 its mentioned as "excisable manufactured goods), so the executor of B-1, has to ensure that the chapter heading of the goods to be exported has been specifically mentioned in B-1 Bond at the time of execution.

d) Range officer is not envy of the industries, but they protect the assesee with hundreds of forthcoming troubles, if the same is brought to their notice within time, well in case where the export consignment is cleared on payment of duty under rebate claim, we suggest always to take supervision of department, coz they will recalculate the duty, check assessable value, check entries of duty payment, ( if in bond they do check the entries in bond register) and supervise the export, and after this if any field obligation or formalities is found incorrect, then the responsibility is shared and covered by range officer, saving the assessee.

e) customs verification of cargo is conducted 3% at random for the consignment supervised and sealed by excise officer, while 50% or more under self sealing, as the customs has to ascertain the quality/quantity/price and duty involvement as per ARE-1 and shipping bill. if any irregularity is found at customs, then it may be detained at customs point and would be reported to exporter and the range.

---------------------------------------------------------------------------------------------------------------------------------

choice is in your hands, to play safe or not :)

Upgrade to CAclubindia Pro. Subscribe Now!

Ram kr. (Buisness) (883 Points)
Replied 26 August 2012

As per your query.

1)We are Manufacturer of Medicine and have Importer Exporter Code, Registered in Export Promotion Council. CT-1 is executed by us.

2) Inputs is our Packing Material like Corrugated Boxes. Presently We are doing export sepertaly through through CT-1 and directly remove from Manufacturer Place.

3) Now we want to sale such input seperatly and alongwith our product in our premises through CT-1 in replace of Manufactuer place.

4) We are availing all export incentive like DEPB and Duty Drawback,FPS on all products.

5) We are purchasing such input directly from Manufacturer.

6) We are Manufacturer and availing Cenvat Credit and paying full rate of duty. Presently we are also trading sale such inputs without availing cenvat credit. Now we want to sale such inputs in our premised through Factory Stuffing and CT-1.

Thanks

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 26 August 2012

query no 5) is replied incomplere, whether you have paid ED and availed the credit of same in your RG23A part 2?

as corrugated boxes are used for packing of your goods, and you pack your goods in corrugated boxes, and these boxes are exported to overseas alongwith the medicines, ( correct me if i m explaining wrong), hence the valuation is done for medicine and not for boxes

now you intend to clear the boxes alone? or fillled with medicines ? and want to stuff the medicine into the corrugated boxes?

a brief process u want to adopt will be helpful to guide a correct method.

Ram kr. (Buisness) (883 Points)
Replied 27 August 2012

query no. 5) yes we are availing cenvat credit on such input in RG23A Part-11.

Further you are right. we want to stuff the containor along with corrugated boxes.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 28 August 2012

when the corrugated boxes are cleared as packing box of your medicine, you dont have to show it seperately and maintain formalities for it,

take cenvat credit of corrugated boxes, and utilise the same in clearance of your medicines , at the time of clearance, you have to declare on ARE-1, under mode of packing as "corrugated boxes" also in packing list.

balance corrugated boxes is your input, and you are not trading the same but using the same as inputs for paking of your final products, hence dury credit is available to you.

for clearance of packing products in which your medicines are packed, you dont need to mtaintain seperate export formalities, but it will be part of your medicine clearance only,