Supply of materials under concessional rate (6%) of Duty under notification 12/2015 srl.no.321b

[THYAGARAJAN KALYANASUNDARAM]

Dear sir,

One of my client going to supply of materials under concessional rate (6%) of Duty under notification 12/2015 srl.no.321b.

Kindly clarify my following doubts

1. whether we can avail cenvat input credit for input used for above supply?

2. any sparete register to be maintained for input or output?

3. If any other procedure to be followed

[MADAN RAHEJA]

Dear Sir,

1. S.No. 321b of Notification 12/2012- CE (inserted vide Not. 12/2015) provides for concessional rate of 6% on all inputs for use in manufacture of LED driver or MCPCB for LED lights and fixtures or LED lamps subject to condition that where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed. These Rules have since been replaced with new Rules w.e.f. 1-4-2016 vide Notification 20/2016-CE(NT).

 

2. Since use of inputs is in a different factory, the aforesaid Rules and procedure prescribed therein has to be followed. Primarily it is for recipient manufacturer to initiate procedure by filing information, Bond etc. with his jurisdictional officers, you can avail the benefit of concessional rate on the basis of information received by you from such recipient manufacturer. You have to maintain record of information, the removal details, such as number and date of invoice, description, quantity and value of subject goods and amount of excise duty paid at concessional rate and retain the same in records.

3. There is no restriction on your availing Cenvat credit on your inputs,

 

AI Summary

Concessional duty for inputs permits reduced rate for LED component manufacture when procedural rules and recordkeeping are followed. Concessional duty applies to inputs for manufacture of LED drivers, MCPCB and LED lamps, subject to procedural compliance where use is outside the factory under the revised removal rules effective 1 4 2016. The recipient manufacturer must file required information, bond and paperwork with jurisdictional officers; suppliers may charge the concessional rate based on that information and must retain records of removals (invoice number/date, description, quantity, value and duty paid). Cenvat credit on inputs remains available.