Removal of dutiable goods to DTA against EPCG Invalidation letter

[deepak kalambate]

Dear Sir,

We have received Invalidation letter (issued by DGFT) in our name for supplying capital goods in local market.

Please Let us know procedure for removal of dutiable goods in local market without payment of duty against EPCG Authorisation (Invalidation letter).

Regards,

Deepak

[CSSANJAY MALHOTRA]

Dear Deepak,

Supplies against EPCG Invalidation letter would be on payment of duty as is done in regular course of business. You need to mention on the phase of Invoice "" Supplies against EPCG Invalidation / Authorisation No............"

Further process would be that either of BUYER OR SUPPLIER has to claim TED (Terminal Excise Duty) Refund from the office of jurisdictional DGFT for which procedure as specified under Chapter 5 of FTP 2015-20 is to be followed.

regards

 

[deepak kalambate]

Dear Sir,

Is there C.Ex. Notification for this?

We have already supplied material without payment of duty under C.Ex Invoice against this EPCG License.

Now who has to pay C.Ex duty?

Please advise.

[CSSANJAY MALHOTRA]

Dear Deepak,

Excise Duty is to be paid by the manufacturer at the time of clearance of goods from his factory against EPCG Authorisation with invalidation letter. Para 8.3 prescribes for claiming refund of TED (Terminal Excise Duty) either by the manufacturer or receiver of goods.

Excise Duty exemption exists in case of supplies against International Competitive Bidding Agreements and for same Excise procedure is specified.

regards

[deepak kalambate]

Dear Sir

The buyer has obtained EPCG license for import of Capital Goods at ZERO percent duty. Later on he applied for invalidation letter for indigenous procurement of similar goods.

There will be ZERO percent customs duty if he procured same goods from other country. Then why C.Ex. duty is applicable for domestic procurement against same license.

Please advise.

[CSSANJAY MALHOTRA]

Dear Deepak,

Please understand that Custom Notification exists for Exemption of Duty in respect of Import of Capital Goods against EPCG Licence. for e.g. Custom Notification No. 16/2015-Customs dated 01.04.2015, hence the goods are exempt from Import Duties.

Further no Central Excise Notification exists for Excise Duty Exemption in respect of supplies under EPCG with invalidation letter, exception being in case of supplies under International bidding competitive agreements.

Hope above clear your doubts.

 

AI Summary

Excise duty liability arises on domestic supplies under EPCG invalidation; manufacturer pays and TED refund may be claimed. Removal of goods to DTA against an EPCG invalidation letter is subject to Central Excise duty payable by the manufacturer at clearance; the invoice must record supply against the EPCG invalidation/authorisation. Either the manufacturer or the recipient may claim Terminal Excise Duty refund from the jurisdictional DGFT under Chapter 5 of the FTP 2015-20. Customs exemption applies to imports under EPCG, but no general excise exemption exists for domestic procurement under invalidation, save for International Competitive Bidding exceptions.