Thursday, 23 July 2015

Government issues Notifications to restrict benefit in respect of CVD exemption for certain goods under exemption notifications, to domestic manufacturers

We are pleased to release a Tax Alert summarizing Central Excise notification nos. 34/2015, 35/2015 and 36/2015 dated 17 July 2015 amending certain Notifications that provide exemption / concessional rate of duty under Central Excise. These Notifications have been further amended vide Notification Nos. 37/2015, 38/2015
and 39/2015 dated 21 July 2015.

The Supreme Court in the case of M/s SRF Ltd. vs Commissioner of Customs (Import & General) held that the benefit of exemption granted to excisable goods covered under exemption notification with a condition not to avail CENVAT credit can also be extended to importers.

Consequent to this decision, the Government has amended certain exemption notifications with a view to restrict the benefit of exemption / concessional rate of duty only to domestic manufacturers.

Further, vide subsequent notifications it has been clarified that manufacturers who procure exempt inputs will still be eligible to avail benefit under the exemption notifications for their manufactured goods.


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