According to a senior finance ministry official, readymade garment manufacturers will not have to submit certificates for non-availment of Cenvat facility. Drawback benefits will be extended on the basis of self-certification. The official has also said this simplification has been made since readymade garment manufacturers primarily export their products. The simplification will cover both knitted and woven garment manufacturers.
Normally, readymade garment manufacturers, who clear goods from factories for domestic consumption, have to submit an ARE-I declaration. This contains details regarding the goods removed from factories, Cenvat facility on the inputs and the like. The revenue department has been receiving representations from manufacturers that even though they are not clearing goods as per the ARE-I requirements, they have been forced to produce certificates showing non-availment of Cenvat facility. This has been changed now, and henceforth these manufacturers can avail of the duty drawback benefits by self-certification of non-availment of export credit.
However, in order to prevent misuse and safeguard against mis-declaration by exporters, samples will be picked up and send to Central excise formations to carry out random verifications. For this, the customs commissioner has been entrusted with the responsibility to devise a suitable procedure for selection of declarations and forwarding it to the Central excise formations.
For those manufacturers who are not registered with the Central excise, the revenue department has already issued circulars as per which they will not be required to submit any certificate for claiming duty drawback.
These circulars have been issued as per the Kelkar panel reports on indirect taxes. The report had stated that customs clearance procedures should be based on trust. Following this, the revenue department has set up a universal green channel system for risk assessment and verification of declarations.