Hello Experts,
Our raw material supplier is in country ‘A’, the raw material is required for manufacturing a final goods in country ‘B’ by another supplier. We wish to directly ship the raw material from ‘A’ to ‘B’ without bringing the raw material into India. Raw material is not traceable in the final product to be imported from country ‘B’. Payment to be made to supplier in country ‘A’ even before we get the part from country ‘B’. Can we pay without having bill of entry for goods importation from country ‘A’. What should be the valuation when part is imported from country ‘B’. Kindly help by clarifying the procedures to be followed and applicable FEMA/Customs conditions to be adhered.
Saket
Guidelines for Importing Goods Manufactured Abroad with Foreign-Sourced Raw Materials: Customs Valuation and Documentation Process A query was raised regarding the import of final goods where raw material is sourced from country 'A' and manufactured into final goods in country 'B', without the raw material entering India. The payment to the supplier in country 'A' is to be made in advance. The question concerns the procedures and valuation for customs without a bill of entry for the raw material. The response advised paying in advance, notifying the Customs Department and banker, and handling the transaction as 'Bill to you and Ship to B.' Customs duty should be based on the total value of goods manufactured by country 'B', with all documentation submitted to relevant authorities. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
