Area Based exemption – value addition rates and inputs - cement and clinker separated; tapioca starch added as input; value addition rate of 75% fixed for fatty acids and Ferro alloys
Remember the confusing “value addition” based; refund based; region biased; exemption Notifications? Have a look at TIOL-DDT-885-12.06.2008 and -31.03.2008 and our story Ceiling in rate - Sealing of fate.
Central Excise Notifications 32/1999, 33/1999, 39/2001, 56/2002, 57/2002, 56/2003, 71/2003, 20/2007 allow a strange exemption to goods produced in different areas like North-East, Kutch, J&K etc,. The exemption is the duty paid on value addition norms fixed by the government, on the goods manufactured starting from inputs specified in the notification.
For example, for Cement or Cement Clinker, the value addition rate is 75 and the input is Limestone and gypsum. Now how can you manufacture cement clinker starting from gypsum? This impossible situation is now corrected.
Now Cement and Cement clinker are separated as two items and the input for cement is Lime stone and gypsum and for cement clinker, it is limestone. But this raises another question – how can somebody manufacture cement starting from both Lime stone and gypsum? Is the exemption not available if the starting point is either limestone or gypsum or does the and in the notification mean or?
Maize was the only specified input for Modified starch or Glucose; now maize starch or tapioca starch are added. Please note here it is or not and.
Two more items are added to the list:
1. Fatty acids or Glycerine falling under Chapter 29 or 38 with Crude palm kernel, coconut, mustard or rapeseed oil as inputs, and
2. Ferro alloys, namely, ferro chrome, ferro manganese or silico manganese falling under Chapter 72 with Chrome ore or manganese ore as inputs.
Both the items will have a 75% rate.
All the above mentioned notifications are amended as above.
NOTIFICATION NOs 49,50,51,52,53,54,55 to ., Dated: October 3, 2008