CENVAT Reversal for merchant export

[CAHemanth Kumar]

Dear Experts,

Does reversal of CENVAT under rule 6(3) of CCR, 2004 will apply for merchant exports, treating as a trading activity or can we take shelter under Rule 6(6) (v) , i.e. export under bond in terms of the provisions of the Central Excise Rules, 2002.

Please provide your views and suportings.

Thanks in advance.

AI Summary

CENVAT Credit Reversal Not Required for Merchant Exports Under Rule 6(3); Rule 6(6)(v) Applies to Duty-Free Goods Exported A query was raised regarding the applicability of CENVAT reversal under Rule 6(3) of the CENVAT Credit Rules, 2004, for merchant exports, which are considered trading activities. The question was whether these activities could be exempt under Rule 6(6)(v), which pertains to exports under bond according to the Central Excise Rules, 2002. In response, it was clarified that merchant exporters, who procure goods without duty for export, should not treat these as exempted goods. Therefore, reversal of credit is not necessary, and Rule 6(6)(v) can be applied.