PROCUREMENT OF MATERIALS WITHOUT ED

[SENTHIL KUMAR]

Dear Sir

I am one of the subcontractor to M/s.BHEL,TRICHY doing fabrication works of Boiler components for various power projects.

Now BHEL insists us to send the finished components to MEGA POWER PROJECT SITE WITH IN INDIA(EX.GADARAWARA, DARLIPAALI, NEYVELI ETC.,) which are excise duty exempted projects.

Now we are despatching the materials to site without ED but procuring raw materials(ex.STEEL) with ED.

01. WHETHER BHEL CAN ISSUE US PAC (PROJECT AUTHORITY CERTIFICATE)

02. IF PAC ISSUED WHETHER WE CAN PROCURE RAW MATERIALS WITH OUT ED.

Kindly clarify us above said points.

Regards

S.SENTHIL KUMAR

AI Summary

Project Authority Certificate enables duty-free procurement and direct invoicing for suppliers to excise-exempt projects.
Where a prime contractor issues purchase orders on an excise-exempt basis and provides a Project Authority Certificate naming the subcontractor as supplier, the subcontractor may invoice the project client without charging excise duty and procure inputs duty-free; absent exemption documentation at purchase, inputs may be bought duty-paid and cleared without payment of excise duty using available Cenvat credit.