The Hindu Business Line : No more excise relief on petro goods supplied to EOUs

THE Finance Ministry has turned down an industry request to remove or clear petroleum products from the refineries to export oriented units (EOUs) without payment of excise duty. This request has been made consequent to the withdrawal of warehousing facility for petroleum products in the first week of September this year.

The Central Board of Excise and Customs (CBEC) has said in a circular that a number of mechanisms have already been provided to give excise duty relief on excisable goods supplied to EOUs and therefore, "there is no justification to consider any further procedure in the matter."

The revenue department has highlighted that EOUs are entitled to avail themselves of the Cenvat credit scheme whereby, units which receive duty-paid goods can avail themselves of input credit for the duty paid on such goods and utilise the credit for payment of duty on clearances to the domestic tariff area. Even if for some reason the credit cannot be utilised, it can be claimed as a refund.

It was also pointed out that supplies to EOUs are treated as "deemed export" and manufacturers have the additional facility to claim the benefit of refund of terminal excise duty and deemed export drawback on such supplies to EOUs.

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