GOVERNMENT INTRODUCES SIMPLIFIED PROCEDURE FOR EXCISE DUTY ON THE TEXTILE SECTOR

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The Government has introduced a simplified system of procedures for the new assessees in the textile sector as part of the rationalization of excise duties. The new system has been drawn up after receiving suggestions from the public. The salient features of the new textile rules and procedures that come into effect from April 1, 2003 are as follows:

• Yarn processors, powerlooms, hand processors and power processors, who do only job work for others, need not take any excise registration or maintain records or pay duty. For such job workers, all formalities would be undertaken by the trader/master weaver/the owner of goods, who gets the job work done.
• The movement of goods in such cases would be under a simple (printed and serially numbered) challan, a practice that is already followed by the trade even now. Such challans can be prepared in local language also, in addition to english. The procedure permits movement of goods from one job worker to another and also final clearance of the goods from job worker’s premises. The job worker only has to make entries in the challan.
• The trader/master-weaver/owner has been permitted to clear goods directly from the premises of the job worker on payment of duty.
• In case the job worker wants to clear goods on payment of duty, he can do so. In such cases, after taking registration, he can also authorize the trader/supplier to make payment of duty on his behalf.
• The procedure for registration (for those who would be paying duty) has been simplified. There is no need for the assessee to visit Central Excise office for this purpose. The help of the office bearers of the trade associations is solicited in this regard. Individual assessee can collect the forms from the associations, fill the same and hand it over to the office bearers. The office bearers can approach the jurisdictional Commissioners for instant registration of the units. A special cell for this purpose has been opened in all Commissionerates. Normally no verification of premises by the officers would be conducted. Assessees not having Income Tax PAN would also be granted registration.
• A simplified procedure for filing of return has been prescribed. Those manufacturing yarn preparatories (i.e. twisting, warping, doubling of yarns), unprocessed fabrics and readymade garments can file quarterly return in a simplified format. The duty in respect of clearances for a particular month has to be paid by the 5^th of the succeeding month.
• In case a person requires to pass on the credit on goods sold by him without being manufactured by him, he can take registration as a registered dealer.
• Facility of endorsement of duty paying documents has been made available to those who are undertaking non-excisable or exempted process. Such persons simply have to endorse the duty paying documents to the next persons to whom they sell the goods.
• Provisions have been made for allowing credit in respect of inputs (namely, yarn and fabrics) lying in stock, inputs in process and inputs contained in finished goods lying in stock as on 31.03.2003. There will be no need to produce duty paying documents for this stock and the assessee can take the entire credit himself based on the formula which will be prescribed. What the assessee or the trader (who is registered) has to do is to give a declaration of the description, quantity and value of the stock (yarn, unprocessed fabrics lying with the dealers/manufacturers, and processed fabrics lying with the manufacturers only) and take credit on the strength of this declaration, which can be utilized, for payment of duty on his clearances.
• Credit of duty paid on inputs used by a job worker can be utilized for payment of duty, when the job worker clears goods on payment of duty.
• It is also being provided that for procedural mistakes, no penalty or coercive action will be taken.
• Considering the trade practices, a system of sending the goods on proforma invoice to the buyer has been prescribed. The seller can issue the final invoice within five days from the removal of goods, after the same has been accepted by the buyer.
• The Commissioners of Central Excise have been asked to issue trade notices, explaining the procedures to be followed in detail. They have also been asked to give the contact numbers and addresses where the assessee can contact in case of any difficulty or query. The assessee may use this facility, and can contact the Commissioner or other Central Excise officers, who would extend all help and co-operation in this regard.
• Copies of the relevant notifications would be available at the CBEC website www.cbec.gov.in.

In the Union Budget 2003-04, a special thrust has been given for the rationalization of excise duties on the textile sector.