Respected Forum,
i am manufacturer exporter of Readymade Garment availing drawback on export.
i am not registered with central excise and paying lot of service tax on input services
if i myself get registered in central excise and get the refund of service tax under Rule 5 of Cenvat Credit Rule, 2004 as Unutilized Cenvat, will it effect my drawback, if yes, pls explain how or i can avail both the benefit.
pls guide me accordingly
Garment exporter seeks clarity on service tax refund under Rule 5 and impact on duty drawbacks. Both benefits possible. A manufacturer and exporter of readymade garments inquires about the impact of registering with central excise to claim a refund of service tax under Rule 5 of the Cenvat Credit Rule, 2004, on their existing duty drawback benefits. The response clarifies that the All Industry Duty Drawback scheme presumes customs duties on inputs and refunds duties on a weighted average basis. The refund of service tax under Rule 5 does not affect the duty drawback unless specified in the drawback schedule. The manufacturer can avail both benefits simultaneously, but should conduct a cost-benefit analysis based on the product's tariff heading. (AI Summary)
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