Merchant Exporter, Central Excise

[Raja krishnan]

Dear Sir,

A Merchant exporter having export order so please explain the procedure and how to do their Exports as well as Imports. Please explain briefly with Notification & related circulars if any.

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

Please see Chapter 7 of CBEC's Central Excise Manual, 2005 for the procedures required by you.

[MARIAPPAN GOVINDARAJAN]

Shri Rajagopalan Sir, Whether the said procedure has been changed in subsequent Central Excise Manual or remain the same till date?

[YAGAY AND SUN]

Dear Raja

You would have to get CT-1 form from the Jurisdictional Commissioner/Deputy Commissioner/Asstt. Commissioner as the case may be after executing the General Bond along-with Surety/security and handed over this CT-1 to your supplier with duly signed ARE-1 form to the supplier of the Raw material. Supplier would submit a copy of the CT-1 to their jurisdictional Central Excise Department.

Material may directly be shipped to the port by the supplier as per your instruction along with the supplier's excise invoice and duly filled ARE-1. After that you may raise your export invoice and packing list.

On the Shipping Bill, you would have to incorporate the name of the manufacturer/supplier. You would have to file the proof of export and duly acknowledged copy of the same would be provided to the supplier for his future use.

However, before executing B-1 Bond, it is advisable to get Registration Cum Membership Certificate (RCMC) for your firm, so that u do not have to execute Bank Guarantee for the said Bond.

Also apply for factory stuffing permission for stuffing in containers within factory premises. For waiver of VAT please provide H form to your vendor.

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

(Please plant at least 5 sapling every year to protect our environment and Mother Earth)

[KASTURI SETHI]

Sir,

Basic procedure remains the same as per Chapter 7 of CBEC's Central Excise Manual, 2005. Formalities of paper work remains the same. However, Notification Nos.42/2001-CE(NT) to 45/2001-CE(NT) have been amended umpteen times.Procedure for export to Nepal has changed vide Notification No. 26/2011-C.E. (N.T.), dated 5-12-2011. Most of the amendments pertain to the precautions and measures to be taken by the officers of the deptt. for curbing the misuse of export facility. Practically, it is not possible to explain the whole procedure in detail in this forum/site. One has to go through Chapter 7 of CBEC's Central Excise Manual of Supplementary, 2005 as advised by Sh.Rajagopalan Ranganathan, Sir.

[Rajagopalan Ranganathan]

Dear Shri. Marriappan Govindarajan Sir.

CBEC Manual for Central Excise was updated in 2005. After no updation for the same had been attempted by CBEC. As rightly observed by Shri. Kasturi Sir, lot of amendments have been effected in various notification and export to Nepal was made on par with export to other countries. But the prescribed procedure has not undergone drastic changes. Therefore I advised to refer to Chapter 7 of the manual.

[Mahir S]

Yes sir, the basic primary procedure enumerated as envisaged under chapter 7 of the CBEC Manual is operative till today, as rightly explained above in detail.

[Mahir S]

Sir,

The procedure to be followed by a Merchant Exporter is as under :-

1. Merchant exporter execute B-1 Bond with its jurisdictional excise authorities.

2. Obtain CT-1 form and debit the running Bond register for the duty amount

3. Prepare ARE-1 form at transaction value (at the price agreed between manufacturer and Merchant exporter in local currency) and sign it.

4. Forward CT-1 and ARE-1 form to manufacturer.

5. Manufacturer raises local sales invoice on Merchant exporter at the same rate/value which is mentioned on CT-1 and ARE-1 without charging Excise Duty and Sales tax with a remarks that goods being supplied against CT-1 and Form-H.

6. Duty Forgone based on local sales invoice is mentioned on ARE-1 to complete it.

7. Local sales invoice to carry name of end customer (foreign buyer to whom Merchant exporter is going to ship the product)

8. After excise examination and sealing inform the Merchant exporter about it.

9. Merchant exporter raises Export Sales Invoice on its foreign buyer in foreign currency and prepare Packing List and provide it to Manufacturer and ask him to load the material on lorry and move it to Indian custom port from where goods will be physically shipped abroad

10. In the meantime, based on export Invoice, Merchant exporter file the shipping bill with the help of its CHA

11. Manufacturer load the material and send it to custom port alongwith Export Invoice (in foreign currency) as provided by Merchant Exporter + Packing List + required copies of ARE-1.

12. Merchant exporter’s CHA take over the goods at custom port and complete the export formalities

13. Goods are physically exported

14. Merchant exporter submit the proof of export (ARE-1 copy, HBL, Export Invoice (in foreign currency + Local purchase Invoice) to its own jurisdictional excise office to discharge the bond and also send copy of the same to Manufacturer who in turn submit the same to their excise office to close the transaction.

15. Merchant exporter provide the Form-H to manufacture.

[MARIAPPAN GOVINDARAJAN]

Thank you Sir for your clarification.

[KASTURI SETHI]

Step-by-step procedure is a ready reckoner for assessees/questioner. Really appreciable.

[Mahir S]

Sir, Thnx for the appreciation..

[Yatin Bhopi]

Dear experts

Just have a doubt, goods supplied under CT-1 form & under ARE-1 can be bought to customer premises \ warehouse (for export only) or it has to be send directly to port only?

[MUKUND THAKKAR]

please refer point no 11. guide line is given by shri Mahir...

[Raja krishnan]

THANKS TO ALL.

[Mahir S]

Yatin ji,

In this regard, please refer Para 04 of the Board’s Circular No. 952/13/2011 – CX dated 08/09/2011 for clarification on the issue.