International Competitive Bidding - Sub-contractors too eligible for exemption
THE letter D.O. F.No. 334/15/2014-TRU dated 10.07.2014 in Annexure III under the head 'Clarifications - Central Excise' mentions the following against Sr. no. 4 -
4) All goods falling under any Chapter supplied against International Competitive Bidding (ICB) are fully exempt from excise duty [Sl.No.336 of notification No. 12/2012-CE dated 17.3.2012], subject to the condition: “If the goods are exempted from the duties of customs leviable under the First Schedule to Customs Tariff Act 1975 and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India". A doubt has been raised whether the excise duty exemption under this notification is available to sub-contractors who supply goods to the main contractor who has won the ICB contract. It is clarified that the said exemption is also available to sub-contractors for manufacture and supply of goods for or on behalf of the main contractor (who has won the bid for the project through ICB) for execution of the said project, subject to compliance of conditions specified, if any.TE
As mentioned, the aforesaid clarification appears in the TRU letter but it would have been more prominently known had it been issued as a Circular and also referred to the following Tribunal decisions which held so -
KENT INTROL PVT LTD -
UNIQUE INDUSTRIAL HANDLERS PVT LTD -
We can assume that the clarification has retrospective effect.