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Bhalchandra R (DYM)     26 June 2014

Ct1 to third party ( vendor)

Dear Sir,


We are in receipt of one order for supply of material upto indian port. After which our Customer will export it to his overseas customer. We are not registered under excise. So our customer can not issue form CT1 in our name. Can our customer give CT1 in the name of our Vendor?

Please advice


 3 Replies

Arun Kumar Singh (Advocate)     28 June 2014

The merchant exporter is not required to registered with central excise for export of goods without payment of duty under CT-1. The Merchant exporter is required to execute a bond in Form B-1,so that goods can be cleared by thE supplier manufacturer to Mertchant exporter without payment of duty.  Merchant Exporter registered with recognised EPC and Star Export House do not have to furnish any security/surity while executing bond, unless they have come to the adverse notice of department - CBE&C circular No. 613/4/2001-CX dated 31-01-2002, confirmed in CBE&C circular No 711/27/2003-CX dated 30-04-2003.  If bond is executed by Merchant Exporter, he will obtain certificates in form CT-1 from Superintendent of Central Excise on the basis of proforma Invoice provided by the supplier manufacturer to merchant exporter.

Bhalchandra R (DYM)     28 June 2014

Thanks Sir,

In this case our customer is Merchant exporter, who is purchasing material from us & exporting it to his overseas customer.

We are not registered under Excise. Hence we are procuring it from our vendor who is registered under Excise.

Can our customer issue CT1 in the name of our Vendor?

Suryanarayana Sathineni (Consultant in Indirect Tax Matters)     22 January 2016

If that be so, your vendor would become the manufacturer exporter on behalf of the ultimate exporter ( merchant exporter in this case). In this scenerio, your vendor raises the ARE1 stating that he intend to clear the consignment to any permissible country on behalf the merchant exporter and both the vendor and the merchant exporter need to sign on the ARE1 and tahe ARE1 would be send along with the material to the concerned port and the merchant exporter then raise the Shipping Bill, commercial invoice and packing list to the foreign customer in FC duly mentionint the name of the manufacturer. once the export is completed, the Merchant exporter send back the customs endorsed export documents to the manufacturer ( your vendor in this case) for his submitting to his jurisdictional excise Range and the Merchant exporter simultaneously submit the relevant documents to his Maritime Commissioner for proof of export and to get the recredit of CT1 amount in his Bond Account.

In view of this , your name would not be appearing in the transaction though you are arranging the transaction on your behalf and it is only a facilitation kind of activity in view of your relation with your foreign customer.



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