SEZ Developer - Amendment in Rule 6(6) (i) of CENVAT Credit Rules – Only Prospective
As you may recollect, the CENVAT Credit Rules have been amended by Notification No. 50/2008-CE (N.T.) dated 31st December, 2008 whereby the clearances made to both ‘SEZ units' and ‘SEZ developers' have been put on the same plane so far as Rule 6 of CCR is concerned and as a result, the manufacturers making clearances even to SEZ developers henceforth would not be required to maintain separate accounts or to pay 10% amount or reverse the credit as required under Rule 6 of CCR.
In DDT 1024 – 02.01.2009, we had raised certain issues like,
It should in probability end for the clearances made prospectively from 1/1/2009. Then what about past clearances? This is again an issue for raising big audit objections by C& AG.
Apart from the clearances made to SEZ units/SEZ developers directly, the DTA units also make clearances to contractors appointed by SEZ units. How to treat these clearances? Should they be treated as clearances made to SEZ units?
The government by amending clause i) of Rule 6 of CCR appears to be of the view that the clearances to SEZ developers/SEZ units as not constituting ‘exports under bond' so as to be covered under clause (v) of Rule 6(6) of CCR. Will this in any way weaken the DRI view point of holding such clearances as constituting ‘export' under bond?
Maybe the Board should come out with a detailed clarification on these issues and be a good sport and make this amendment retrospectively valid – we may have to wait till the next Budget for that to happen.
But the Board has not been as good as we hoped and the Board gave a clarification that the amendment is prospective in nature and would apply to supplies cleared from the date of the notification only and it is applicable only for the "authorized operations" of the developer.
This important clarification was again a secret communication, not a public circular.
CBEC's F.No.267 /52/2008- CX -8 Dated : January 7, 2009