Removal of Goods to Foreign Warehouse - Rejected

[Pradeep Jain]

Dear Sir,

Removal of Goods to our Foreign Warehouse . We have send the same under ARE-1 and Letter of Under Taking submitted to the Excise Department.

Some of goods were reject by the Customer and we are not able to take the delivery of the same. The same will be scrapped at abroad .

Qurery is that:-

1- do we need to pay excise duty along with interest of the rejected goods laying at Foreign Warehouse.

2- Is there any Sales Tax obligation ?

Kindly advise.

Regards

Pradeep Jain

[MUKUND THAKKAR]

1- do we need to pay excise duty along with interest of the rejected goods laying at Foreign Warehouse.

Need not to pay any excise duty if goods has been rejected by overseas buyer and laying at Foreign warehouse.

2- Is there any Sales Tax obligation ?

No.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Mukund

[Rajagopalan Ranganathan]

Sir,

As long as the exported goods are rejected and kept as scrap in a foreign country, still it is export of goods and no central excise duty or vat is chargeable on the same. if the scrapped goods are returned /re- imported by you then the treatment will be different under Customs Act.

[Mahir S]

If BRC is not received for the said exported goods, then excise duty amount thereon is liable to be paid/debited with interest.

[YAGAY andSUN]

Proportionate Export Incentives also need to be paid back along with interest if availed.

AI Summary

Exported goods rejected abroad: no excise or sales tax while abroad, subject to BRC and reimport rules. Goods rejected by an overseas buyer and scrapped abroad do not attract central excise duty or sales tax while they remain abroad; re importation invokes customs treatment. Non receipt of export documentation can render excise duty payable with interest. Availment of export incentives may require proportionate refund with interest.