2. INTERNATIONAL TRADE
OPERATIONS
A tax may be defined as a "pecuniary burden laid
upon individuals or property owners to support
the government, a payment exacted by legislative
authority. A tax is not a voluntary payment or
donation, but an enforced contribution.
Direct Tax
Indirect Tax
3. Direct Tax
Is a kind of charge imposed directly on the tax
payer and paid directly to the government by the
person to the government.
4. Indirect Tax
An indirect tax is a tax collected by an
intermediary (such as a retail store) from the
person who bears the ultimate economic burden
of the tax (such as the customer). An indirect tax
is one that can be shifted by the taxpayer to
someone else
5. Some Important Indirect Taxes
Imposed in India
Customs Duty
Central Excise Duty
Service Tax
Sales Tax
Value Added Tax (VAT)
Securities Transaction Tax (STT)
6. Central Excise Tax
Central Government levies excise duty under the
Central Excise Act, 1944 and the Central Excise
Tariff Act, 1985. It is charged on such goods
which are manufactured in India and are meant
for domestic consumption.
7. Objectives of the Excise Duty
Protect People
Add Revenue
Neutralize Subsidies
8. Procedure of registration for central
Excise
Persons requiring Registration
Application for registration
Issue of certificate
Validity of Registration
9. Assessment of Duty
Involves:
Declaration of Quantity of Goods
Value of Goods
Applicable rates of Central Excise Duty in the
invoice.
Rule 6, of Central Excise Rule 2002 authorizes
the assessee to assess the duty himself and this
is known as ‘self assessment Procedure’
11. Payment of Duty
Duty for goods clearance should be paid by the
5th day of the following month but SSI units are
allowed to pay by 15th day. Duty is deposited in
cash or by cheque through TR6 challans in the
notified bank branches. Challan must indicate
registration number, classification of good.
Bank keeps 1 copy for its records and returns two
(One for exporter and another to the range office
along with quarterly return.)
12. Clearance under Rebate Claim
‘Payment of Duty’ under Daily Stock Account.
However duty could be paid on monthly basis or
fortnightly.
Special Permission for exports from other factory
or warehouse other than registered.
Excisable goods shall be exported within six
months from the date on which they were cleared
for export from the factory of manufacturer. Date
to be mentioned on ARE-1.
13. Contd……
Rebate claim admissible only if the rebate claim is
500 or more.
Rebate claim for those excisable goods export of
which is prohibited is not admissable.
14. Application for Remission of Excise
(ARE-1)
ARE-1 is prescribed by Central Board of Excise
and Customs as a document for excise
clearance.
Running Serial Number
Prepared in quintuplicate
15. Procedure
Sealing of Goods and Examination at the place of
dispatch
Dispatch of Goods by Self Sealing and Self
Certification
16. Sealing of Goods and Examination
at the place of dispatch
Copies Colour Submitted to
Original White Superintendent/
inspector of C.E. shall
return it to the exporter
after endorsement
Duplicate Buff Superintendent/
inspector of C.E. shall
return it to the exporter
after endorsement
Triplicate Pink To officer with whom
rebate is to be claimed
Quadruplicate Green Retained for official
records
Quintuplicate Blue Export Promotion
Council
17. Dispatch of Goods by Self Sealing and
Self Certification
Copies Submitted to Further Action
Original Sent to the place of
export along with goods
Duplicate Sent to the place of
export along with goods
Triplicate To the Superintendent
within 24 hours of
removal
To the officer from
whom rebate is to be
claimed
Quadruplicate To the Superintendent
within 24 hours of
removal
For records
Quintuplicate Export Promotion
Council
18. Examination of goods at the place of
exports
Original duplicate copy of ARE-1 to be presented
along with the goods
Customs examine and cite shipping bill number
Return the original copy to exporter
and duplicate copy to rebate claim office
19. Clearance Without Payment of
Duty
Exporter- furnish Bond and obtain Certificate
(Security or Surety with Bond)
Manufacturer Exporter- Letter of Undertaking (For
exporter with good record), no certificate is
required. However compliance with ‘acceptance
to proof of export’ and other terms and condition
is expected. This is Bond with nil security.
20. Contd……..
Manufacturer Exporter- LUT + Invoice
Merchant Exporter- Bond certificate + Invoice (as
proof of export)
Certificate of Bond
For 1-3 month depending on the track record of the
company
Description of goods from a particular factory/ warehouse
Duty involved (calculated on transacted value and duty rate)
Ensure that at the time (period of 7 days from the time of
removal) of debit sufficient credit is available to cover it
21. Contd……..
Shall record the clearance in his account as ‘duty payable
but forgone under rule 19’.
22. Procedure
Sealing of Goods and examination at the place of
dispatch
Dispatch of goods by self sealing and self
certification
23. Sealing of Goods and Examination
at the place of dispatch
Copies Colour Submitted to
Original White Superintendent/
inspector of C.E. shall
return it to the exporter
after endorsement
Duplicate Buff Superintendent/
inspector of C.E. shall
return it to the exporter
after endorsement
Triplicate Pink To officer with whom
rebate is to be claimed
Quadruplicate Green Retained for official
records
Quintuplicate Blue Export Promotion
Council
24. Dispatch of Goods by Self Sealing and
Self Certification
Copies Submitted to Further Action
Original Sent to the place of
export along with goods
Duplicate Sent to the place of
export along with goods
Triplicate To the Superintendent
within 24 hours of
removal
To the bond accepting
authority
Quadruplicate To the Superintendent
within 24 hours of
removal
To the officer from
whom rebate is to be
claimed
Quintuplicate Export Promotion
Council
25. Re- Credit Against Proof
Original ARE-1
Shipping Bill
Bill of Lading
To bond accepting authorities and credit would be
availed.
Non export within 6 months attracts payment of
duty and high interest rates.