Payment of excise duty

[SANJEEV JADHAV]

We are purchasing patterns from outside pattern makers on behalf of foreign customer. We are remitting pattern payment to the pattern makers and chargeing the same to the foreign party by making seperate invoice including 10% to 15% margin in the pattern value. The said patterns are used only for manufactur of export castings ordered by foreign party. Please guide whether we required to pay excise duty on the pattern amount.

[Surender Gupta]

If you are merely purchasing the patterns from the patters makers on specific orders and supply the same (as such) to the foreign buyers, no excise duty is payable by you since excise duty is payable by the manufactures only. In your case, since the patter makers are the manufacturers, they, if not availing the SSI exemption benefit or other exemption benefit if available to them, are required to pay excise duty. On the other side, it appear from your query that you are using such patterns in export casting. The nature and process is not clear but anyhow, since you are exporter, you may export the same without payment of duty to the foreign buyers.

AI Summary

Excise duty liability rests with manufacturers, not purchasers, and patterns exported may be sent without duty. Excise duty liability rests with manufacturers; a buyer who purchases patterns from outside pattern makers and supplies them to foreign buyers (as such) is not liable. Pattern makers must pay excise unless they legitimately claim exemptions such as SSI relief. Patterns exported by the exporter may be sent without payment of duty, subject to applicable export reliefs and procedures.