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K.R. Srivats

NEW DELHI, June 11

THE Finance Ministry has devised a mechanism through which credit of excise duty paid on yarn used by the exempted powerloom units can be passed to multiple buyers.

Powerloom weavers had sought a mechanism that would enable them to pass on the credit even if their exempted final products, made from a single consignment of yarn and covered under single invoice, is sold to more than one user.

Powerloom weavers availing themselves of clearance-based exemption were allowed to pass on the credit available on their inputs, i.e., yarns by endorsing the duty paid document in favour of the buyer. This facility was available to such weavers only in cases where the input documents are endorsed in full, i.e., in favour of "one person" (single buyer)

For those weavers who send their exempted grey fabrics made from a single consignment of yarn (yarn covered under single input invoice) to various users (multiple buyers), the option of passing the credit was not available till date.

The Central Board of Excise and Customs (CBEC) has now worked out an optional scheme for independent weavers of unprocessed fabrics falling under Chapters 51, 52, 54, 55, 58 or 60. A circular issued by CBEC said that a person opting for the scheme should file an application as that in the case of registration of textile manufacturers.

Instead of granting excise registration to the person, the weaver would be allotted (within 24 hours of the receipt of the application) a 12-digit declarant code - the first two digits for the Commissionerate, the third and fourth digits for division, fifth and sixth digits for range and the balance would be running serial number of such assessee.

The first six digits, i.e., location codes should be as per the codes given by the Directorate-General of Systems and Data Management. The balance six numbers would be running serial numbers, starting from 000001.

The exempted unit will receive inputs, i.e., yarns under duty paid documents and retain the said documents. While clearing exempted fabrics, the buyer, along with his commercial invoice/document, shall enclose a pre-printed serially numbered challan (in triplicate). The challan would give details of (a) his input/inputs and the related invoice/invoices, (b) particulars of duty paid thereon and (c) the proportionate amount of excise duty paid on inputs i.e., yarn, which is attributable to have been used in the manufacture of the fabrics being cleared under this challan. The original copy of this challan would be an eligible document for the buyer to claim Cenvat credit to the extent of such attributable duty.

Such exempted units would have to also file a quarterly statement showing the quantity and value of goods received as well as sold and the proportionate credit passed on. The person should enclose all original copies (he may keep photocopies for his records) of their input invoices (on the strength of which the credits were passed on) received and all the duplicate copies of the challan issued during the year.

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