Removal of Manufacturing goods from Section 65 unit operating under MOOWR,2019

[Abhijeet Mane]

Please clarify whether customs duty payable or not for the removal of Manufacturing Goods from a section 65 unit operating under Manufacture and Other Operations in Warehouse Regulations 2019 to a

1] Special Economic Zone unit ( 'SEZ unit') as defined under SEZ Act,

2] Export Oriented Unit ('EOU') as defined under Foreign Trade policy,

3] another section 65 unit operating under MOOWR 2019.

Also please refer the respective section under Customs Act for the same.

[KASTURI SETHI]

Section 65 of the Customs Act is not applicable to EOU, STP, HTP w.e.f. 13.8.2016. See M.F. (D.R.) Circular No. 6/2019-Cus., dated 20-2-2019.

The manufactured goods may be exported without payment of Customs duty. Clearance for home consumption is on payment of GST. Clearance to SEZ is to be treated as export. Zero rated supply.

Also see Circular No.48/20/Customs dated 27.10.20 and 3/19/customs dated 31.1.19

[Shilpi Jain]

BCD is payable when goods are cleared for home consumption from the warehouse.

1] Special Economic Zone unit ( 'SEZ unit') as defined under SEZ Act, - this is a place outside India as per Customs. Clearance to SEZ no liability.

2] Export Oriented Unit ('EOU') as defined under Foreign Trade policy - clearance to EOU would be on filing of a BoE for home consumption. So a view emerges that BCD would be liable when cleared to EOU but considering the intention of the MOOWR scheme, if the goods are being further exported by the EOU, ideally exemption should still be available. However, looks like a grey area.

3] another section 65 unit operating under MOOWR 2019. - Not liable as there is no clearance for home consumption.

[Raghunandhaanan rvi]

Sir,

Your supply to SEZ from your bonded warehouse is considered an "Export under Section 69 of the Customs Act". Thus, no duty is payable.

Whereas, your supply to EOU is termed as a supply to DTA. Thus, GST payable

Removal of goods from one bonded warehouse to another under transfer bond, duty is not payable

AI Summary

Customs Duty Clarified: No Duty on SEZ Exports, BCD Payable for EOUs Unless Exported, No Duty for Section 65 Transfers. A discussion on the forum addresses whether customs duty is payable for removing manufacturing goods from a Section 65 unit under the Manufacture and Other Operations in Warehouse Regulations (MOOWR) 2019 to various destinations. It is clarified that goods moved to a Special Economic Zone (SEZ) are considered exports and are zero-rated, thus no customs duty is payable. For Export Oriented Units (EOUs), basic customs duty (BCD) is generally payable unless further exported, which remains a grey area. Transfers to another Section 65 unit do not incur duty as there is no clearance for home consumption.