Excess procurement of RM

[kamal chordia]

Dear Sir

We obtained advance authorisattion, in which first we export (SEZ) and thereafter we procured raw material for replenishment against Invalidation letter

in this regard we procured excess qty of RM, for which DGFT advise us to deposit custom duty on excess procurement.

Please advise where we have to deposit custom duty on excess procurement.

In Adv Authorisation Port of import mentioned as Mundra but Licence not registered at Mundra Port as we procured Raw Material indiginously.

Thanks & regards

Kamal

[Ravi Kumar]

As per rules if you want to clear RM to your factory then you have to pay Duty , The other Option is to process at Custom Bonded Warehouse and Do this Without Payment of Duty.

[Kishan Barai]

No Issues, you get do port registration by updating your KYC at mundra port.

AI Summary

Customs duty on excess procurement arises when advance authorized raw materials are cleared for factory use, requiring payment or bonded processing.
Excess procurement of raw materials under an Advance Authorization can trigger a customs duty liability when cleared to the factory; alternatives include paying duty on clearance or processing the goods through a customs bonded warehouse to defer/avoid immediate duty. Administrative alignment by updating KYC to register the licence at the port of import is also available.