EXPORT OF GODDS IMPORTED UNDER EPCG SCHEME

[B C CHORDIA]

Dear Sir,

We have imported Gas Base Gen Set (capital goods) under EPCG Scheme in 2011 now due not viablity due increase in gas price these gen set lying ideal and we want to export to other country we have fulfilled 60% export obligation. now we ready to pay pro rata duty with interest for unfullfilled export obligation.

can we do the same if yes please briefly inform the procedure

[YAGAY andSUN]

Dear B.C.Chordia,

Please check the para 5.17 of the HBP Vol.1 read with chapter 5 of the FTP 2009 - 2014 which enumerates, that

In case of failure to fulfill export obligation or any other condition of authorization, authorization holder shall be liable for action under FT (DandR) Act, 1992, Orders and Rules made thereunder, provisions of FTP and Customs Act, 1962.

You can remove Capital goods as re-export under Section 74 of the Customs Act,1962. after seeking the permission from the Board. However you would not be able to get the duty drawback.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[B C CHORDIA]

We ready to fore go duty draw back but export will be not to same supplier. please guide us to get permission

[YAGAY andSUN]

Dear B.C.Chordia,

There is no restriction in Section 74 of the Customs Act, 1962 that capital goods must be exported to the same person, but it can be any customer.

You would have to seek permission from the CBEandC for exporting the capital goods out of country. You may draft an application, stating all material facts, ( i.e.from importing under EPCG to partial fulfillment of export obligation, applied for redemption and after payment of applicable duties, and submitting the documentary evidence to Customs Department/Central Excise Department to the level of their satisfaction, you want to remove the capital goods as export out of India) and submit it before CBEandC.

CBEandC may put some conditions to safeguard the revenue and grant permission accordingly. On the basis of this permission, you may export the Capital Goods.

Regards

Team YAGAY and SUN

(Management and Indirect Taxation)

AI Summary

Re-export of capital goods requires customs permission and payment of outstanding duties, with no entitlement to duty drawback. Export of capital goods imported under the EPCG Scheme is permissible as re-export under Section 74 of the Customs Act subject to prior customs permission; the applicant must disclose import and partial export-obligation performance, submit documentary evidence, pay duties and interest for unfulfilled obligation, and accept that duty drawback will not be available, while customs may impose conditions to safeguard revenue.