EODC for Advance Authorisation - Physical Export

[BRIJMOHAN GOYAL]

Dear All,

We had taken Advance License for import of Raw material and components against  Physical Export Order. We had executed the order in time . During EODC,  EO is fulfilled in terms of Value but in terms of qty, Out of 4 nos. items , short fall is by 1 no. only.

So, Please advise how to regularize AA in this case.

B M GOYAL

[YAGAY andSUN]

Dear Brij,

Please refer following para of the HBP Vol 1 read with FTP.

4.28 Regularization of Bona fide Default

Cases of bonafide default in fulfillment of EO may be regularized by RA as under:

a) If EO is fulfilled in terms of value, but there is a shortfall in terms of quantity, the Authorization holder shall, for regularization, pay:

(i) to customs authorities, customs duty on unutilized value of imported/ indigenously procured material along with interest as notified; however, for the customs duty component, the authorization holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB; and

(ii) an amount equivalent to 3 percent of the CIF value of unutilized imported material through a TR in authorized branch of Central Bank of India indicating the "Head Account: 1453, Foreign Trade and Export Promotion and Minor Head 102". Authorization holder shall also be required to obtain a separate authorization for regularization of excess imported input. However, provisions of this sub paragraph shall not be applicable if unutilized imported material was freely importable on the date of import.

Regards

Team YAGAY & SUN

(Management & Indirect Tax Consultants)

AI Summary

Regularization of bona fide default: pay customs duty or use duty credit scrips and remit prescribed CIF levy to regularize export shortfall. If an Advance Authorization meets export obligation by value but is short in quantity, the Regional Authority may regularize the bona fide default only if the holder pays customs duty on the unutilized value with interest (or furnishes valid duty credit scrips), remits a prescribed percentage of the CIF value of unutilized imported material via treasury receipt to the designated head account, and obtains a separate authorization for excess imported input; this regularization is not required where the unutilized material was freely importable on import date.