Cenvat credit on exempted goods exported

[Hasmukh Patel]

Dear Sir,

We are manufacturer of exempted goods. We export more then 90% of exempted goods. As per cenvat credit rule there is no cenvat credit on inputs & input services for manufacturing of exempted final finished goods.

If a manufacturer manufacture excisable goods & export it without payment of duty , then we availed cenvat on inputs, and the same exporter export it's exempted goods then it will be export with input duty burden ?

AI Summary

Cenvat credit limitations for exempted goods affect export treatment and shift focus to rebate or drawback procedures.
Rule 6 of the Cenvat Credit Rules offers alternatives for manufacturers of both dutiable and exempted products, including denial of credit for inputs exclusively used for exempted goods, separate inventory maintenance, payment in lieu of segregation, or formula allocation, with the chosen option communicated to the department for the financial year. Amendment of export notifications removed the facility to export exempted goods under bond, which affects eligibility to preserve input duty via bond clearance; affected parties must therefore consider rebate or drawback procedures and ARE documentation requirements for any claim of duty paid on inputs.