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Bhalchandra R (DYM)     12 September 2015

Cenvat credit against supply of material to mega project

Respected Sirs,

We are in receipt of an order for the supply of material to a Project having Mega Project Status & excise duty exempted. Our customer who is a main contractor will be issueing Project Authority Certificate to us to procure material from sub-vendors at nil excise duty.

For your kind information following clause of tender is as below :

Supply of goods by main/ sub-vendors shall be regarded as `Deemed Exports’ under FTP-2009-2014, under 8.2 (f) of FTP benefits to supplier is governed by 8.4.4 (i) & 8.6.1. supplies will be eligible for Deemed Export Drawback in terms of Para 8.3 (b) of FTP on Central Excise paid. Necessary PAC issued by Project Authority and Payment Certificate by Customer will be issued to the supplier/ vendor. Vender/supplier will be responsible to avail deemed export benefits as per FTP and purchaser will be responsible for any financial liabilities on this account

We would like to know can our vendor ( sub-vendor) avail cenvat credit  of the inputs (Excise duty paid by him on his purchases)  or there will be partial reversal in excise duty ( 6% or 7%) to Excise dept if removes material from his factory with Nil excise duty?. 

Please advice.


 1 Replies

Ramesh Chandra Verma (advocate)     09 June 2016

In terms of rule 6(6), no reversal is required provided conditions are not met

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