Trading Export is Considered as Exempted Services

[RAM SHARMA]

Dear Experts,

We are manufacturer cum merchant exporter, we are doing manufacturing sale and trading sale in domestic market as well as export market. whether our trading export will be treated as exempted service and cenvat to be reverse under rule 6(3) of cenvat credit rule 2004.

Please advice.

Thanks

AI Summary

Trading Exports Not Exempted Services Under Rule 6(3) of Cenvat Credit Rules, No Credit Reversal Needed A manufacturer and merchant exporter sought advice on whether trading exports are considered exempted services under Rule 6(3) of the Cenvat Credit Rules, 2004, which would require reversing Cenvat credit. An expert clarified that Rule 6(3) does not apply to exported trading goods, as exported goods are treated as duty-paid. Another contributor agreed, emphasizing that taxes should not be exported to avoid increasing export costs, which could harm competitiveness. A case law was referenced to support this position, indicating that the reversal of Cenvat credit is not justified for exported exempt goods.