Sale to SEZ – How to claim rebate?
A netizen has sent us a copy of a letter written by the Gujarat Chamber of Commerce and Industry to the CBEC Chairman about difficulties in getting rebate for goods supplied to SEZ. The letter states,
As per the provisions of the Special Economic Zone, goods sold by a unit in Domestic Tariff Area to a Unit in this Zone are considered as exports. As per Rule 30 of the Special Economic Zone Rules 2006, a unit in DTA can supply goods to a unit in SEZ either under Bond or under claim of rebate. As per the rule, if the goods are supplied to SEZ unit by DTA unit under claim of rebate, the DTA unit can claim the refund of Excise Duty.
Notwithstanding the aforesaid provision, the DTA units are not in a position to get refund of Excise duty paid on the goods supplied to a unit in SEZ as no procedure has been prescribed by the Government.
On account of the above anomaly, huge amount of funds of DTA units are blocked for want of rebate of Duty.
No procedure is required Sir. As you have rightly mentioned, Rule 30 of the SEZ Rules provides that
The Domestic Tariff Area supplier supplying goods to a Unit or Developer shall clear the goods, as in the case of exports, either under bond or as duty paid goods under claim of rebate on the cover of ARE-I referred to in notification number 40/2001- Central Excise (NT) dated the 26th June, 2001. (Of course this Notification was rescinded in 2004 about which the Commerce Ministry is blissfully ignorant in 2006)
SEZ is deemed to be outside India and any clearance to SEZ is export and rebate can be claimed as if the goods are exported. Apparently, the Chamber has faced some problems where rebate is not sanctioned. Will the Board issue a clarification that clearances to SEZ should be treated as exports and rebate granted?