Procedure for destroying returned exported goods of excise regime

[manish kumar]

Dear Sir, If an Assessee has exported some finished goods on payment of excise duty under rebate in 2016-17. Then after some time finished goods returned. Now a days the said goods has been expired . So The Assessee wants to destroy the goods after debiting excise duty. What procedure should be adopted for destroying the expired goods ? Please reply in details.

[KASTURI SETHI]

Procedure has been laid down in Chapter 18 (Remission of Duty and Destruction of Goods) (Para No.2 -Manner of Destruction) in CBEC' s Excise Manual of Supplementary Instructions, 2005 (as amended).

Also see FAQ dated 31.7.17

Question 3 :What is the procedure for movement of time expired medicines from the retail outlets to the manufacturer for destruction?

Answer : In such cases, the manufacturer may issue a credit note within the time specified in sub-section (2) of Section 34 of the CGST Act, 2017 subject to the condition that the person returning the expired medicines reduces his ITC. Subsequently, when the time expired goods are destroyed, the manufacturer has to reverse his ITC on account of goods being destroyed. Where the goods are returned after the time limit specified in section 34(2) of the CGST Act, 2017, the registered person returning the goods shall issue a tax invoice, as it is a supply within the meaning of Section 7 of the CGST Act, 2017.

[DR.MARIAPPAN GOVINDARAJAN]

Thanks, Kasthuri Sir, It is additional information to my professional knowledge.

[Ganeshan Kalyani]

Thanks Sri Kasturi Sir for your views.

[Nash Industries I Pvt Ltd]

Whether the exported goods are re-imported or to be re-imported?

if already re-imported, the Credit Note would have already been issued to the customer. Destruction/ Disposal is a supply and GST is payable at the time of disposal.

If to be reimported, follow the procedure under Customs Notification 94/96, issue the CN to the supplier, repay the benefits like rebate of excise duty to the Government, pay GST at the time of disposal.

Regards

S.Ramaswamy

AI Summary

Destruction of returned exported goods: issue credit note, reverse input tax credit, and treat disposal as a taxable supply. Guidance requires issuance of a credit note within the statutory return period when exported goods are returned; the returner must reduce input tax credit and the manufacturer must reverse his input tax credit upon destruction. Returns after the statutory time are treated as a supply requiring a tax invoice. If goods are re imported, follow customs re import procedures, issue credit note, repay excise rebate benefits, and treat destruction/disposal as a taxable supply with GST payable.