Import of free issue materials for export of assembled goods

[MohanLal tiwari]

Dear sir/s,

One of my client is having order for export wherein the customer is supplying few items as free issue and want to include the value of free issue materials for charging Duty (amending the order for rate to include free issue mtls value) but do not want to show in invoice & ARE-1 etc. Kindly advise if it can be done, if yes, how the outstanding will get settled as the customer will be pay after deducting the value of free issue mtls.

AI Summary

Customs duty on free issue materials remains payable on import; duty drawback can neutralise paid import duties on export.
Importation of buyer-supplied free issue materials remains subject to customs duties and related levies unless a specific exemption applies; commercial free-of-cost status does not negate legal taxability. Practically, parties can show both chargeable and free values on invoices and shipping bills, obtain a GR waiver/NOC from the authorised dealer, and where duties were paid on import pursue Duty Drawback or other export relief at export to neutralise the import duty burden. Entry tax liability depends on whether the goods are listed in the relevant notification.