exemption of excise duty

[Guest]

We are being contracted to supply items for solar thermal power project approved by ministry of new and renewable energy. We are supplying through a EPC contractor and we are liable to charge 0% excise duty due to exemption. The problem is we are laden with a large input excise credit from our raw material purchase. Can the duty exemption be passed on to our raw material supplier also, so that we will also be charged 0% duty.

[NEERAJ KUMAR, RANCHI]

In my view, it can not be done.

[Dilip Darji]

Dear Sir.

Please quote exemption notification number and Sr.no. under which you are claiming exemption.

AI Summary

Excise duty exemption cannot be transferred to upstream suppliers; identify the applicable exemption notification to support no excise charge. Suppliers to a ministry-approved solar thermal power project claiming 0% excise duty on outward supplies via an EPC contractor ask whether that exemption can be passed to upstream raw material suppliers so they will charge no excise. Record replies state the exemption cannot simply be transferred to suppliers and that claimants must cite the specific exemption notification and serial number under which the zero-rate treatment is asserted.