benefit of duty free import under Custom Notification No. 50/2017-customs

[rajeshh rawat]

Dear Sir,

I am handicrafts exporter, deals in electric lamps. For electric lamps, we need to import raw material from china & SEZ's in India. Recently I came know that EPCH issues DFIC under Custom Notification no. 50/2017 –customs dated 30.06.2018 and the scheme is given at Notification No. 9/2015-20 dated 28^th May 2018. The extract of notification is as under:-

ii. Handicrafts

a. Duty free import entitlement of tools, trimmings and embellishments upto 5% of FOB value of exports during previous financial year. Entitlement shall extend to merchant exporters tied up with supporting manufacturers.

I have purchased raw material from one of suppliers located in bonded warehouse at Ghaziabad and other suppliers are located at SEZ. But supplier said that his supply from the bonded ware house will be covered under DFIC and issued an invoice of warehouse address i.e public bonded warehouse but council has denied my application and is only accepting supplies made from SEZ or directly imported by the exporter..

Kindly clarify that I can avail the benefit of above mentioned scheme and provide us any custom rule / act if any for availing the same.

Further, please also clarify that the purchase from bonded warehouse is import for DTA units.

Thanks and Regards

[YAGAY andSUN]

In our view the council has rightly rejected your application as goods so procured from the Bonded warehouse cannot be treated at par with SEZ/Imported goods.

AI Summary

Duty-free import entitlement limited to SEZ or direct imports; bonded warehouse purchases do not qualify for concession. Duty free import entitlement for handicrafts grants tools, trimmings and embellishments up to a percentage of FOB exports and extends to merchant exporters tied to supporting manufacturers; the entitlement applies to SEZ supplies or direct imports. The council rejected a claim where inputs were procured from a public bonded warehouse, holding that bonded-warehouse supplies are not equivalent to SEZ or directly imported goods and thus do not qualify for the duty-free concession.