Refund of Terminal Excise Duty - DGFT Clarifies
IT has come to the notice of the DGFT that some RAs of DGFT and the Offices of Development Commissioners of SEZ are providing refund of Terminal Excise Duty (TED) even in those cases where supplies of goods, under deemed exports, is ab-initio exempted.
2. There are three categories of supplies where supply of goods, under deemed exports, is ab-initio exempted from payment of excise duties. These are:
(i) Supply of goods under Invalidation letter issued against Advance Authorisation [Para 8.3(c) of FTP]; [Now, which Central Excise Notification gives ab initio exemption to goods cleared under an invalidation letter?]
(ii) Supply of goods under ICB [Para 8.3(c) of FTP]; and
(iii) Supply of goods to EOUs [Para 6.11(c) (ii) of FTP]
DGFT clarifies that:
1. Prudent financial management and adherence to discipline of budget would be compromised if refund is provided, in cases, where exemption is mandated.
2. In fact, in such cases the relevant taxes should not have been collected to begin with. And if, there has been an error/oversight committed, then the agency collecting the tax would refund it, rather than seeking reimbursement from another agency.
3. Accordingly, in respect of supplies, as stated above, no refund of TED should be provided by RAs of DGFT/Office of Development Commissioners, because such supplies are ab-initio exempted from payment of excise duty.
DGFT Policy Circular No. 16/(RE-2012)/2009-14, Dated: February 15, 2013