Commerce Ministry for Retrospective benefit on supplies to SEZ Developers

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Commerce Ministry for Retrospective benefit on supplies to SEZ Developers

AIT News Network

NEW DELHI. Domestic Manufacturers who were issued show cause notice by excise department asking them to reverse CENVAT credit equal to 10 per cent of value of goods on supplies to SEZ Developers are all set to get relief with Commerce Ministry asking Finance Ministry to grant the benefit of non-reversal of CENVAT Credit on supplies made to SEZ Developers.

Commerce Ministry has conveyed to the Finance Ministry that the intention of the Government since the inception of SEZ scheme is to allow the benefits of non-reversal of CENVAT credit to domestic manufacturers on supplies to SEZ developers/units. Therefore, the Finance Ministry should implement the Notification No. 50/2008-Central Excise (Non-Tariff) dated 10.12.08 with retrospective effect from 27th December 2006 i.e. the date on which Custom Circular No. 29/2006 clarified that the supplies from DTA to SEZ developer/unit should be treated as “exports”.

Since the stand of Commerce Ministry is in tune with the Policy of the Government of India; Finance Ministry is expected to go for retrospective implementation of Central Excise Non-Tariff Notification No. 50/2008 which has amended CENVAT Credit rules to fill the unintentional lacuna in rules which though allowed the benefit of non-reversal of credit to SEZ units but were silent about clearances to SEZ Developers and the Field Officers of Central Excise department used this lacuna as a weapon to harass the manufacturers by issuing the demands.

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