Supply from sez to bonded warehouse

[RAKESH JAIN]

Sir, needs ur advise on the under Transaction Details:

1. Our SEZ unit has sold goods to a foreign buyer against payment in freely convertible foreign currency.

2. As per the foreign buyer’s instructions, the goods are to be delivered and stored in a bonded warehouse in India, which is duly notified under Section 60 of the Customs Act, 1962.

3. The foreign buyer retains ownership of the goods while they remain stored in the bonded warehouse.

4. Subsequently, the foreign buyer sells the goods to an indigenous buyer in India, with payment also received in freely convertible foreign currency.

5. The indigenous buyer will take delivery from the bonded warehouse after making the necessary customs duty and IGST payments for clearance.

Clarification Sought:

In view of the above transaction, we request clarification on whether the initial sale made by our SEZ unit to the foreign buyer should be classified as:

a) DTA Sale,

b) Deemed Export, or

c) Physical Export under SEZ and Customs regulations.

AI Summary

SEZ Unit's Bonded Warehouse Sale: Deemed Export or DTA Sale? Legal Forum Discusses Classification Under SEZ & Customs Rules. A discussion on a legal forum involves a query about the classification of a transaction involving a Special Economic Zone (SEZ) unit selling goods to a foreign buyer. The goods are stored in a bonded warehouse in India before being sold to a domestic buyer. The main question is whether this transaction should be classified as a Domestic Tariff Area (DTA) Sale, Deemed Export, or Physical Export under SEZ and Customs regulations. The consensus is that it should be classified as Deemed Export, as the goods remain in India temporarily for further sale, despite the transaction involving foreign currency. Further references to legal provisions and notifications are suggested for precise interpretation.