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Revenue Board allows central excise duty adjustment on various goods

ISLAMABAD (June 13 2003) : To facilitate importers and manufacturers of excisable commodities, the Central Board of Revenue (CBR) has allowed adjustment of central excise duty (CED) on paint and varnishes, perfumery and cosmetics, soaps and detergents, an order issued here on Thursday said.

However, no CED adjustment would be available on non-manufactured tobacco, beverage concentrate, and POL products except base lube oil.

Sources said that the CBR has issued procedure on CED adjustment paid at import or local stages against excise duty payable on finished products in the Budget 2003-04.

However, the procedure did not specify the names of items on which adjustment would be unavailable, which confused the stakeholders.

Now, the CBR has pointed out that adjustment would be available on paint and varnishes, perfumery and cosmetics, soaps and detergents, whereas the same would not be available for non-manufactured tobacco, beverage concentrate and POL products.

The CBR has issued instructions to all the collectors of sales tax and central excise that the Central Excise General Order (CEGO) 2/2003 was applicable on only those items like paint and varnishes, perfumery and cosmetics, soaps and detergents, etc., on which adjustment of CED has been allowed in terms of section 3 (11) of the Central Excise Act, 1944, under SRO 333 (I)/2002.

The CEGO contains only procedure, which has been issued just to benefit the importer/local manufacturer for credit adjustment through Account Current Ledger (ACL).

No adjustment whatsoever was available to items like non-manufactured tobacco, beverage concentrate and POL products except base lube oil, etc., which have not been allowed this facility under SRO 333 (I)/2002.

The CBR has also directed the collectorates to convey the decision to all the industrial units operating within their respective jurisdiction.

The central excise duty would be adjusted as input credit paid at import stage or on locally produced goods on raw material or semi-finished or bulk goods, which were further used in manufacturing of finished goods or re-packing of the same, against the central excise duty payable on finished goods.

The semi-finished or bulk material would be imported by the manufacturer himself.

In case of locally produced goods, the same would be procured directly from the manufacturers.

In case of imported goods, the amount of central excise duty paid would be credited in column 5 of the ACL along with Bill of Entry number and date.

In case of locally produced goods, the amount of the central excise duty paid would be credited in column 5 of the ACL along with AR No and date.

There would be tangible value addition on the excisable finished products vis-a-vis cost of raw materials manufacturing.

The amount of central excise duty paid at import or local stages would be credited and raw material/semi-finished/bulk goods would be consumed within three months time, which might be further extended for three months by the concerned assistant collector of the Central Excise on case-to-case basis.

If the manufacturer intends to sell the central excise duty paid goods, which have already been credited in the ACL, he could dispose them of with the prior approval of the collector after depositing the amount of central excise duty already credited in the ACL.

If the goods were not fit for use in the industrial process, owing to any reason, for which they were obtained, they could be destroyed with the prior permission of the collector under the supervision of proper central excise officer authorised on this behalf, the CBR added.

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