Excise duty exemption to Ready Mix Concrete (RMC)-Big relief to Real Estate/Construction Industry
Finance Minister Arun Jaitley has brought some sort of relief for the real estate/construction industry which is already struggling due to sluggish demand and economic slowdown. Excise duty exemption, which was earlier limited to Concrete Mix (CM) only, now being extended to Ready Mix Concrete (RMC) manufactured at construction site for construction work.
This is among the one of the rare scenarios in which Government has nullified the effect of Supreme Court judgement which was decided in favour of revenue earlier. In the case of Larsen and Tubro Ltd Vs. CCE, Hyderabad dated 06 October 2015, the Apex court adopted strict interpretation for dealing with the Exemption Notification no. 4/1997-C.E. (as amended by 12/2012-C.E.) and denied the excise duty exemption on Ready Mix Concrete (RMC). The Apex Court held that Concrete Mix and Ready Mix Concrete are separate products, thus exemption available to Concrete Mix can not be extended to Ready Mix Concrete.
Notification 12/2012-C.E. dated 17-03-2012 has been suitably amended vide Notification no. 12/2016-C.E. effective from 01-03-2016 so as to include Ready Mix Concrete for providing exemption from Excise duty along with Concrete Mix.
This could be considered as a welcome move by the government to reduce the burden on home buyers and to provide affordable housing to the common people of India, at the same time it would provide some impetus to the real estate/construction industry.
The authors are Lucky Ahuja – Manager and Ashish Sodhani – Executive from SKP Business Consulting LLP and the above views are personal in nature.
