Re-import of exported equipment

[MANOHARAN ARUMUGAM]

Dear Experts,

I am planning to import a capital equipment under EPCG scheme. One of the critical part of the equipment (eg.Motor) is not readily available with the manufacturer. The equipment manufacturer asks us to procure the critical part (Motor) locally and send it to him for fixing in the capital equipment. I am planning to export the part under Sl.No.5 of Customs Notification No.45/2017-Customs dt.30.06.2017. My question is;

1. Am I correct to export under above Notification?

2. If so, at the time of importing the capital equipment (will be fitted with the Motor which I am planning to send to the equipment manufacturer), can I assess the duty for the value of the equipment excluding the value of the Motor?

3. What is any other procedure for seamless clearance at the time of import?

Please guide.

A.Manoharan

[Shilpi Jain]

To me prima facie it looks like u can export under 45/2017-Cus. Notification does not require import of the equipment as such and even if that is the condition, the motor is in fact being imported as such without being put to use there , just that it is fitted to something else.

In case you face issues while importing you can challenge the assessment order/BoE.

[Raghunandhaanan rvi]

Sir,

Notification 45/2017—Customs will apply re-import duties to exported goods. In your case, you sent the motor to the manufacturer free of cost or at a reduced price to fix it on the capital goods you intend to import. The value of the motor must be included in the cost of capital goods, and duty is payable on the total invoice value as per Rule 10(1)(b) of the Customs Valuation (Imported Goods) Rules 2007. Please go through the rules for better clarity.

[YAGAY and SUN]

In addition to above replies, Provision related to GR Waiver to close the IDMPS must be taken care of.

AI Summary

Customs valuation: re-imported component's value must be included in import assessment under valuation rules, triggering duty liability.
The key operative position is that while the export notification may permit sending the motor to the overseas manufacturer, re import duties apply and the motor's value must be included in the cost of the imported capital equipment for customs valuation purposes, creating duty liability on the total invoice value; importers may challenge assessment orders and should ensure any required GR waiver to close the IDMPS.