Simplified Export Procedure for Exempted Units – Exporter of Ready-Made Garments

CA Bhavin Mehta

There can be a situation where units are fully exempted from payment of Central excise duty as the value of the clearances for home consumption is less than 1.5 crore. However, total value of clearances (domestic plus export) is more than 4 crore. Let’s take an example for better understanding

• In the above scenarios, since the value of the clearances for home consumption is less than 1.5 crores, is the assessee liable to take Central excise registration?
• If the answer to above question is no, what are the procedures that needs to be followed by such units?

As per PART – III of the CBEC Manual & Para No. 3.3 Serial No. 6 Instruction D.O. F.No. B-1/3/2011-TRU, dated 25-3-2011, units manufacturing exclusively for export & which are fully exempted from payment of duty by notification granting exemption based on value of clearances for home consumption, will not be required to take Central excise registration.

Let us understand the procedure as laid down in the CBEC manual that has to be followed, the details of which are as under: –

• Manufacturers exempted from payment of duty will have to file declaration & obtain Declarant Code Number.
• Manufacturers will be exempted from filing of ARE 1 & bond, till they cross the exemption limit of 1.5 crore.
• They shall maintain simple record of quantity & production & value of clearance. (similar to RG 1 / Daily Stock Account)
• Such units shall file a prescribed quarterly statement to the jurisdictional range Supt.

Documentation to be prepared

• Invoice bearing printed serial number or computer-generated serial number for the purpose of clearances for home consumption as well as for exports will have to be prepared.
• Declarant’s code number should be mentioned on all the invoices.
• The invoice should contain particulars of description of goods, name and address of the buyer, destination, Value, progressive total value of excisable goods cleared for home consumption, vehicle number, date & time of removal of goods.
• Invoice will be signed by the Manufacturer or his authorised agent.
• In case of indirect exports (i.e export to merchant exporters), the invoice should bear a remark “Export through Merchant Exporters” & the invoice should also have Import Export Code Number of the merchant exporter.
• In case of direct exports, the invoice should bear a remark “For Export” and also have his own Import Export Code Number.
  

Proof of Export – Details to be submitted by the assessee for Proof of Export –

♠ For Direct Exports

i. Self Attested Photocopy of Shipping Bill (EP Copy),

ii. Customs Attested Copy of Bill of Lading

iii. Foreign Exchange Remittance Certificates

♠ For Export through Merchant Exporter

i. Self attested photocopy of document prescribed by the Sales tax Department i.e H-Form or its equivalent.

Proof of export should be submitted to the range officer within a period of 6 months from the date of clearance of goods from the factory of production.

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