CT-1 requirement for buying from excise exempted unit

[Guest]

Dear All,

If i want to buy material for exports from a unit which is registered with central excise but exempted from central excise under SSI registration for a small period of the financial year till it reaches the stipulated exemption turnover limit of ₹ 1.5 Cr, Do i have to give a ARE-1 & CT-1? As there is no excise benefit which the seller can pass on, I doubt that there is a need to provide them with a CT-1. Further for the benefit of the unit we provide Form H to them so they can get a deduction of our invoice amounts from their total turnover to enjoy the exemption for a prolonged period. Isn't a Form H enough to get that deduction?

[KASTURI SETHI]

SSI units which are exempted from Central Excise duty on account of their turnover below prescribed limit, do not have to follow ARE-I and bond procedure. In this context Board's circular no.648/39/2002-CX dated 25.7.2002 is appended below:-

SSI Units export - Proof of export - Clarifications

Circular No. 648/39/2002-CX., dated 25-7-2002

[Ganeshan Kalyani]

Sir very relevant and apt reference is given by Sri Kasturi Sir. It enriched my knowledge. The querist got his reply. Thanks.

AI Summary

Exemption for small-scale units: no ARE-1 or bond required for exports, and Form H can support turnover deduction. SSI units exempt from central excise on account of turnover are not required to follow the ARE-1 and bond procedure for exports, as clarified by Board guidance in Circular No. 648/39/2002-CX. Purchasers commonly provide Form H to allow exempted suppliers to deduct invoice amounts from turnover to retain exemption.