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

Company Seeks to Export Unviable Gen Set, Willing to Pay Pro Rata Duty Under Section 74 of Customs Act 1962 A company imported a Gas Base Gen Set under the EPCG Scheme in 2011 but now finds it unviable due to increased gas prices and seeks to export it. Having fulfilled 60% of their export obligation, they are willing to pay pro rata duty with interest for the unfulfilled part. They inquire about the procedure for exporting the goods. It is advised that they can re-export under Section 74 of the Customs Act, 1962, after obtaining permission from the Board, though they will not receive a duty drawback. They must submit an application to CBE&C, which may impose conditions to protect revenue.