EOU TO EOU SALE OF GOODS - PAYMENT OF GST & CUSTOMS DUTY

[Ramachandran Chandru]

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.

AI Summary

Inter-unit transfer of goods between EOUs requires GST and recipient payment of endorsed customs duty before DTA clearance.
Supply of goods from one EOU to another is taxable under GST and requires payment of applicable GST and compensation cess. The supplier must endorse on commercial documents the amount of Basic Customs Duty exemption availed on inputs; the recipient EOU must pay that endorsed customs duty and discharge any customs-duty reversal before clearance into DTA. Transfers require prior intimation to Development Commissioners and customs, and endorsed tax invoice copies must be submitted to the jurisdictional customs authorities. EOUs must register under GST and pay IGST on imports.