The Indian government, on 5 May’15, released a circular for clarification regarding new proviso in CENVAT Credit Rule in transit sale through dealer.
In clarification to Notification No. 8/2015 – Central Excise (NT) dated 1 Mar’15 amending Central Excise Rules, 2002 (CER), the government has issued a circular of clarification to the new proviso inserted in sub-rule (2) of rule 11 particularly with reference to procedural requirement after the amendment where an indenting or unregistered dealer negotiates transit sale.
The provisos inserted are:
“Provided also that if the goods are directly sent to any person on the direction of the registered dealer, the invoice shall also contain the details of the registered dealer as the buyer and the person as the consignee, and that person shall take CENVAT credit on the basis of the registered dealer’s invoice.”
“Provided also that if the goods imported under the cover of a bill of entry are sent directly to buyer’s premises, the invoice issued by the importer shall mention that goods are sent directly from the place or port of import to the buyer’s premises.”
The government in its circular clarifies that the new provisos are an addition to the existing rules and do not withdraw or amend rule 9 of the CENVAT Credit Rules, 2004 which prescribes the document on the basis of which CENVAT Credit can be availed. No amendments have been made regarding registration requirements also.
The new provisos are added to enhance ease of doing business and reduce transportation costs and time to deliver the consignment. CENVAT Credit can be availed by the consignee on the basis of CENVAT invoice issued by the manufacturer or registered importer, when the transit deal is negotiated by an un-registered dealer.
VS Datey, Excise Consultant based in Pune, in an interview with Steel 360 May’15 issue, discussed about the new provisos and their applicability to the CENVAT Credit Rules. The discussion had reached the same implications as clarified in the government circular.
View original notification at the link below:
http://www.cbec.gov.in/excise/cx-circulars/cx-circ15/circ1003-2015cx.htm
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