As per Foreign Trade Policy, supply of finished goods from EOU to EOU is permissible on payment of GST & Cess and also Customs duty leviable under First Schedule, availed as exemption on such goods. When the goods are transacted between two EOUs, I doubt whether payment of Customs duty is required for clearance. Need clarification whether Customs duty is also to be paid along with GST.
Request the experts to clarify on this.
GST and Customs Duty Rules for Transferring Goods Between Export Oriented Units in India The discussion focuses on the tax implications of transferring goods between Export Oriented Units (EOUs) in India. It clarifies that while transferring goods from one EOU to another, applicable GST and compensation cess must be paid. The supplier EOU must endorse commercial documents with the amount of Customs duty exempted on inputs used in manufacturing. The recipient EOU must reverse this exemption and pay the endorsed Customs duty upon clearance in the Domestic Tariff Area (DTA). The EOU scheme continues under GST, with EOUs required to pay IGST on imports, unlike SEZs. (AI Summary)
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