FMS Scheme

[Sanjay Sharma]

Dear Experts,

As per the notification no. 30/2012-Central Excise Tariff, we understand that we can procure the excisable goods from the domestic market without payment of Excise duty by using the Focus Market scheme duty credit scrip but, there is a confusion about the utilization of the said FMS for the Excise duty payment on finish goods.

In other words,  can we adjust our Excise duty liability on final product against the said FMS rather tan paying the said excise duty by cash or by cenvat credit & if the case is like this then what would be the mechanism to utilize the FMS as there is no change in the form ER-1 yet to taking the effect of this notification?. pls. provide your experts advise in this.

Regards

Sanjay Sharma

[Sanjay Sharma]

If any one can enlighten us in this matter pls.

Regards

Sanjay Sharma

[Alok Kumar]

Dear Mr. Sanjay Sharma,

In terms of para"J" of the above quoted central excise notification you will be entiltled to the cenvat credit of the central excise duty element debited in the scrip.

Once the duty of central excise is debited on the reverse of the scrip you can claim the same in your records.

In the similar way the credit will be taken in your ER-1/ER- 3 RETURN respectively too . when the goods are sourced from manufatcturers then you can show it as goods received from manufcaturers or CENVAT claimed agst. manufacturers .

thanks,

warm regards,

alok kumar

[Alok Kumar]

Dear Mr. sanjay,

Once you justify the said  sourced goods to be your inputs / capital goods you can ser off the said cenvat credit agst your central excise duty liablity of your final excisable goods.

 

thanks,

Alok Kumar

AI Summary

Clarification on Using FMS Duty Credit Scrip to Offset Excise Duty Liability and Claim CENVAT Credit A participant raised a query regarding the Focus Market Scheme (FMS) and its application towards excise duty on final products. The concern was whether the FMS duty credit scrip could be used to offset excise duty liability instead of paying by cash or CENVAT credit, given no changes in form ER-1. Another participant clarified that the central excise duty debited on the scrip could be claimed as CENVAT credit. This credit can be reflected in ER-1 or ER-3 returns, and once goods are justified as inputs or capital goods, the credit can offset excise duty on final products.