We are a merchant exporter. Our supplier is an importer. We have bought the imported material from them and are planning to export the same. Since we do not have Central Excise registration we requested the supplier to accept CT-1 bond and relieve us from the excise duty, to be competitive. Our supplier has Central Excise registration and says he cannot do that and cannot do it under ARE-1 too. How can we solve this issue?
Excise duty is leviable on goods manufactured or produced in India. You intend to re-export imported goods in the same form without carrying out any processing. In that case, excise duty is not leviable and therefore, the CT-1 or ARE-1 procedure need not be followed. You can claim drawback of the customs duty paid on the imported goods under Section 74 of the Customs Act, 1962. You have to follow the procedures laid down in Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995. On imported goods that have not been used after import, you can claim drawback of 98 per cent of the customs duty paid. Drawback is available provided you satisfy the Customs authorities that the goods you export are the same as the goods imported under a particular bill of entry.
Another supplier for a different product is a manufacturer with advance licence obligation. We, as a merchant exporter, have requested him to sell under CT-1 bond to us. In order to meet his export obligation he wants to know how we can do it under the duty drawback scheme. Kindly guide us.
CT-1 will enable you to remove the goods without excise duty payment from the factory of the manufacturer. It is a dispensation independent of whether the goods are exported under claim of duty drawback or in discharge of export obligation. Your supplier can ask to export the goods to be exported under DEEC cum Drawback shipping bill. By doing so, the exports can be counted towards discharge of export obligation against his advance authorisation; and in respect of duty paid materials actually used in export production but not covered by the advance authorisation, drawback can be claimed by way of brand rate fixation route. Drawback at All Industry Rate and discharge of export obligation against advance authorisation cannot be claimed against the same shipping bill. Drawback at All Industry Rate can be claimed by filing drawback shipping bill or exports can be counted towards discharge of export obligation by filing DEEC shipping bill.
If we rent the precincts of our temple for any purpose, do we have to pay service tax?
Yes. However, services by a person by way of renting precincts of a religious place meant for the general public or by way of conduct of any religious ceremony is exempted under notification no. 25/2012-ST dated 20.06.2012, which also says that “general public” means the body of people at large sufficiently defined by some common quality of public or impersonal nature.”