SME Times News Bureau | 14 Sep, 2013
The Federation of Indian Export Organisations (FIEO) has welcomed the recent clarification issued by Department of Revenue stating that payment of amount under Rule 6(3) of the CENVAT Credit Rules, 2004 is not applicable in respect of goods procured indigenously by availing the benefit of Duty Credit Scrips issued under Chapter 3 of Foreign Trade.
"This will give a boost to domestic manufacturing and help in import substitution thereby bridging the trade deficit," said FIEO president Rafeeque Ahmed in a press statement.
He said that the domestic procurement would provide a level playing field to the supplier who would be entitled for CENVAT facility while supplying the final product against the scrips.
Central Excise Authorities have earlier demanded refund of 6% of CENVAT Credit availed on goods cleared against such Duty Credit Scrips as such clearances were being treated as clearances of exempted goods.
Since duty was being paid by Duty Credit Scrips, such debit of duty in the Scrips should have been treated as payment of duty for the purpose of determining the applicability of Rule 6 of the CENVAT Credit Rules.
Taking this view, FIEO had represented the issue with the Department of Revenue which has now been considered.
