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CENTRAL EXCISE CLEARANCE OPTIONS for Exports in India
An exporter has two options to claim central excise clearance.
They are Export under claim of Rebate of Duty and Export under Bond/Letter of Undertaking
Both the merchant exporter and manufacturer exporter can avail of both the above options for clearance of excisable goods.
Export Under Claim of Rebate of Duty
Under this method, the exporter has to pay excise duty, initially, and can claim refund of excise duty, after exportation of goods to countries except Nepal and Bhutan. However this method involves blockage of finances as the procedure involves time for getting back refund of excise duty. Excise procedure is governed under Rule 12.
Where there is balance in Capital Goods Cenvat Credit, it is ideal to use that amount first towards clearance of goods for export.
Exporter can request clearance of goods either with examination or without examination by central excise authorities. Once the central excise authorities make examination, customs authorities may not inspect the goods; before giving customs clearance, if they are satisfied that the seals are not broken. If the exporter desires that the goods may not be examined by the customs authorities at the port/airport of shipment, he should apply for clearance under examination. Excise clearance, after examination is also known as excise clearance under seal.
Export Under Bond / Export under Letter of Undertaking LOU.
Under this method, exporter does not make payment of excise duty. He has to obtain bank guarantee or surety to an amount equivalent to excise duty payable. This is beneficial to the exporter, as finances are not blocked. Once evidence of export is shown, the excise authorities would release the bond. In case of manufacturer-exporter, he can execute undertaking for the amount of excise duty payable instead of submitting Bond. Also read How does CENVAT Credit work? Central excise clearance options CENTRAL EXERCISE CLEARANCE PROCEDURES for Export in India – Part 2 CENTRAL EXERCISE CLEARANCE PROCEDURES for Export in India – Part 1 Procedure for Central Excise Clearance Under Claim of Rebate
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