Page 40 - Focus Group

Excise Tax: The Dilemma

of Form 203C

There have been many issues around the taxability unregistered if it is dealing in excisable commodity.
of transactions involving excise designated zones The fact that many companies use third party DZ to
(DZ). The aspect that is presented in this article manufacture/store/import their excisable products.
deals with two issues relating to the use of form These products are not released in mainland and
203C. directly exported from DZ. Thus, there is no need for
few companies to register under excise even though
203C: Transfer of ownership within designated they deal in the excisable commodities.
zone.
Thus, even though the 203C form enables the
The purpose of form 203C is to transfer the purchaser to obtain the ownership of excisable
ownership of goods within DZ. The two main goods within DZ, it is yet to be seen how FTA will
aspects of this form are: implement this for unregistered companies.
1. Transfer of ownership from the seller to the Issue2: Unintentional transfer of ownership
buyer. (both can be registered or unregistered) through form 203C

2. The movement of the goods has to be from one As an industrial practice many companies are using
designated zone to another. 203C to transfer goods within DZ when in fact some

Issue 1: other declaration
Unregistered forms can be used.
purchaser/buyer For example, a
of excisable company must
goods within a transfer (and not
DZ sale) its excisable

When the transfer goods from a DZ
takes place, three warehouse to its
main things have logistics partner
to be filled in 203C (DZ), companies
form: are issuing 203C.
This form will in
• Original fact transfer the
designated ownership of the
zone goods to the logistics company which is not the

• Destination designated zone intention behind the movement of goods.

• Purchaser TRN Thus, a company needs to be very careful in the
selection 203C form to avoid any issues in the FTA
The seller of the goods has to fill the purchaser laws as well as the general intent of the transaction.
TRN mandatory . The question arises is, what if
the purchaser is not an excise registered entity.
The purchaser TRN is a mandatory field, thus, if
a purchaser is not registered for excise there can
be a problem in transferring goods through this
form. Even though the excise tax return user guide
mentions that a non-excise TRN holder can accept
the form 203C as a purchaser, it is yet to be seen
how this works practically.

Now the question is why will a purchaser company be CA Jaya Rathi

Disclaimer:
This article and/or write ups and/or any of its content shall not be treated as opinion and/or advice in any circumstances of the author(s) and/ or the Chapter. Reader’s to apply their best
judgement in the best interest of their requirement and should seek a formal opinion on any issue.
40 TAX JOURNAL 2020 The Institute of Chartered Accountants of India (Dubai) Chapter NPIO