PAYMENT OF DUTY & TAX FOR SCRAP QTY OVER DUTY FREE IMPORTED GOODS

[CHANDRU RAMACHANDRAN]

I wish to know the applicability of duties & taxes on scrap disposal from the production inputs imported under duty exemption scheme (EOU). As per my opinion, customs duty & IGST is payable on the overall value of scrap qty to be disposed in DTA. The percentage of duty payable is as per rate prevailing at the time of disposal of scrap. Please confirm if my opnion is correct.

AI Summary

Duty on scrap from duty free inputs payable on domestic disposal; in unit destruction avoids duty; valuation depends on export vs domestic.
Duty and IGST are payable when scrap from inputs imported under a duty exemption scheme is disposed into the domestic market; destruction within the unit after intimation avoids duty. If the manufactured goods were exported, the value for duty on scrap sold domestically is the sale transaction value; if the manufactured goods were domestically cleared, the value for duty is the value of the imported inputs.