Export to Merchant Exporter

[Rudrayani Shedjale]

Hi

Regularly we export under UT-1 i.e.Letter of undertaking

in some transactions, we sell the goods to Merchant Exporter without charging excise & vat.They provide us CT-1,A.R.E.1 & (H form later)

so for us it direct export only or what?

Now when we are claiming for cenvat credit refund under Rule 5, we showed it as our export only.

But excise authorities are disallowing that by saying you dont have the proof of export

for such transaction.

I have received the H form & Airway bill from the Merchant Exporter.

isn't it enough to claim as our export?

please guide ASAP.

AI Summary

Clarification on CENVAT Credit Refunds: Transactions with Merchant Exporters as Third-Party Exports under Rule 5 Require Specific Documentation. A discussion took place on a forum regarding the classification of exports and claiming CENVAT credit refunds under Rule 5 of the CENVAT Credit Rules, 2004. The primary issue was whether transactions with a merchant exporter, where goods are sold without excise and VAT, qualify as direct exports. The excise authorities denied the refund claim due to a lack of direct export proof. It was clarified that these transactions are considered 'third-party exports' and require specific documentation, including a shipping bill with both the manufacturer and exporter names, to claim refunds. The discussion also touched on the distinction between drawbacks and refunds, emphasizing that drawbacks are incentives for foreign currency procurement, while refunds return excise duties on inputs. Participants advised on documentation and the strategic use of LUT (UT1) based on CENVAT credit availability.