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'Drawback available for duty-paid inputs used in export product'

TNC Rajagopalan 

We are exporting a product in which we have used components imported under advance authorisation and also duty-paid imported materials and indigenously manufactured components. Can we claim on complete exported products or on only the imported duty paid and indigenously manufactured components? How can we make the claim and at which rate?

As per Para 4.15 of FTP, "as per rate determined and fixed by shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation." Also, note that as per Para 4.08 of FTP, you must take into account the value of any input used, on which benefit of DBK is claimed or intended to be claimed for value addition calculation. At the time of export, you should file a DEEC-cum-DBK shipping bill. Thereafter, you should file the application for fixation of brand rate with your Central Excise authorities under Rule 6 of the Rules, 1995. Once you get the brand rate fixation letter, you can approach the Customs for disbursement of the amount. You cannot get All Industry Rate of for exports made in discharge of export obligation against advance authorisation.



We are a search engine optimisation (SEO)/pay per click (PPC) company providing services to our clients in USA. Our clients do not access our website. We check their websites and tell them what's wrong and give recommendations on how to improve, and then monitor their website to see if they have implemented the changes. In the same way, we do PPC analysis of clients' websites and generate reports on how they can improve traffic on their website. Our place of service is India and place of provision of service is USA. We get paid in US dollars. So, as per our understanding, under Rule 6A of Service Tax Rules, 1994, we fulfil all the criteria for export of services. Furthermore, we don't come under online information and database access or retrieval services. Hence, as per our thinking we don't come under the ambit of service tax. We need your opinion on this to finalise our position.

In my opinion, you are providing consultancy service to clients abroad. Therefore, I agree with your understanding that you export your services and so, you don't have to pay service tax on your activity.

Our domestic turnover is about Rs 60 lakh. We also export about Rs 80 lakh. Do we have to take excise registration when our turnover crosses Rs 1.50 crore?

You need to take registration only when your domestic turnover exceeds Rs 1.50 crore. But, when you reach Rs 90 lakh domestic turnover, you have to file the declaration prescribed under notification 36/2001-CE (NT) dated June 26, 2001. Hopefully, you have followed the simplified export procedure for exempted units to ensure that your export turnover is separately accounted for.

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'Drawback available for duty-paid inputs used in export product'

We are exporting a product in which we have used components imported under advance authorisation and also duty-paid imported materials and indigenously manufactured components. Can we claim drawback on complete exported products or on only the imported duty paid and indigenously manufactured components? How can we make the claim and at which rate?As per Para 4.15 of FTP, "drawback as per rate determined and fixed by Central Excise authority shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the export product. For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation." Also, note that as per Para 4.08 of FTP, you must take into account the value of any input used, on which benefit of DBK is claimed or intended to be claimed for value addition calculation. At the time of export, you should file a DEEC-cum-DBK shipping bill. Thereafter, you should file the application for fix We are exporting a product in which we have used components imported under advance authorisation and also duty-paid imported materials and indigenously manufactured components. Can we claim on complete exported products or on only the imported duty paid and indigenously manufactured components? How can we make the claim and at which rate?

As per Para 4.15 of FTP, "as per rate determined and fixed by shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation." Also, note that as per Para 4.08 of FTP, you must take into account the value of any input used, on which benefit of DBK is claimed or intended to be claimed for value addition calculation. At the time of export, you should file a DEEC-cum-DBK shipping bill. Thereafter, you should file the application for fixation of brand rate with your Central Excise authorities under Rule 6 of the Rules, 1995. Once you get the brand rate fixation letter, you can approach the Customs for disbursement of the amount. You cannot get All Industry Rate of for exports made in discharge of export obligation against advance authorisation.

We are a search engine optimisation (SEO)/pay per click (PPC) company providing services to our clients in USA. Our clients do not access our website. We check their websites and tell them what's wrong and give recommendations on how to improve, and then monitor their website to see if they have implemented the changes. In the same way, we do PPC analysis of clients' websites and generate reports on how they can improve traffic on their website. Our place of service is India and place of provision of service is USA. We get paid in US dollars. So, as per our understanding, under Rule 6A of Service Tax Rules, 1994, we fulfil all the criteria for export of services. Furthermore, we don't come under online information and database access or retrieval services. Hence, as per our thinking we don't come under the ambit of service tax. We need your opinion on this to finalise our position.

In my opinion, you are providing consultancy service to clients abroad. Therefore, I agree with your understanding that you export your services and so, you don't have to pay service tax on your activity.

Our domestic turnover is about Rs 60 lakh. We also export about Rs 80 lakh. Do we have to take excise registration when our turnover crosses Rs 1.50 crore?

You need to take registration only when your domestic turnover exceeds Rs 1.50 crore. But, when you reach Rs 90 lakh domestic turnover, you have to file the declaration prescribed under notification 36/2001-CE (NT) dated June 26, 2001. Hopefully, you have followed the simplified export procedure for exempted units to ensure that your export turnover is separately accounted for.
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Business Standard
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'Drawback available for duty-paid inputs used in export product'

We are exporting a product in which we have used components imported under advance authorisation and also duty-paid imported materials and indigenously manufactured components. Can we claim on complete exported products or on only the imported duty paid and indigenously manufactured components? How can we make the claim and at which rate?

As per Para 4.15 of FTP, "as per rate determined and fixed by shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation." Also, note that as per Para 4.08 of FTP, you must take into account the value of any input used, on which benefit of DBK is claimed or intended to be claimed for value addition calculation. At the time of export, you should file a DEEC-cum-DBK shipping bill. Thereafter, you should file the application for fixation of brand rate with your Central Excise authorities under Rule 6 of the Rules, 1995. Once you get the brand rate fixation letter, you can approach the Customs for disbursement of the amount. You cannot get All Industry Rate of for exports made in discharge of export obligation against advance authorisation.

We are a search engine optimisation (SEO)/pay per click (PPC) company providing services to our clients in USA. Our clients do not access our website. We check their websites and tell them what's wrong and give recommendations on how to improve, and then monitor their website to see if they have implemented the changes. In the same way, we do PPC analysis of clients' websites and generate reports on how they can improve traffic on their website. Our place of service is India and place of provision of service is USA. We get paid in US dollars. So, as per our understanding, under Rule 6A of Service Tax Rules, 1994, we fulfil all the criteria for export of services. Furthermore, we don't come under online information and database access or retrieval services. Hence, as per our thinking we don't come under the ambit of service tax. We need your opinion on this to finalise our position.

In my opinion, you are providing consultancy service to clients abroad. Therefore, I agree with your understanding that you export your services and so, you don't have to pay service tax on your activity.

Our domestic turnover is about Rs 60 lakh. We also export about Rs 80 lakh. Do we have to take excise registration when our turnover crosses Rs 1.50 crore?

You need to take registration only when your domestic turnover exceeds Rs 1.50 crore. But, when you reach Rs 90 lakh domestic turnover, you have to file the declaration prescribed under notification 36/2001-CE (NT) dated June 26, 2001. Hopefully, you have followed the simplified export procedure for exempted units to ensure that your export turnover is separately accounted for.

image
Business Standard
177 22