Import of RM under job work

[Ramesh Sharma]

We received RM free of cost from supplier for job work. Please clarify which notification i have to refer to save custom duty. Do need to submit any BG or undertaking to custom authority. Also answar following queries.

1. We are raising job work invoice on supplier of goods and does not include material cost.

2. what documents we have to maintain to support the job work.

[YAGAY and SUN]

You need not pay any customs duty on importation of materials for job work. Only thing is that the materials should be supplied on free of cost by supplier for job work against execution of export order.

The relevant notification No. 32/97 customs may be referred for details

The main condition is that the resultant product and imported goods if any should be re-exported to the supplier or any other person which the supply may specify within six months from the date of import or within such extended period that may allow by customs.

Further, the FOB value of export should be more than 10% of CIF value of imported goods.

Job work should be undertaken in accordance with the procedure set out in Custms (Import of Goods at Concessional rate of duty for Manufacture of excisable goods) Rules 2016.

AI Summary

Duty exemption for job work applies where imported materials are supplied free and outputs are re exported under concessional procedure.
Imported raw materials supplied free for job work are exempt from customs duty where materials are supplied free against an export order, job work follows the concessional import procedure, the resultant goods and any imported inputs are re exported to the supplier or a specified person within six months or an extended period, and the FOB value of exports exceeds the required proportion of the CIF value of imports; Notification on concessional imports and the Customs (Import of Goods at Concessional rate of duty for Manufacture of excisable goods) Rules, 2016 prescribe the procedural and documentation requirements.