Clarification about Re-Export of CG's under Lease agreement of imports

[Raju M]

Dear

We want to Import the machinery from Vietnam under a lease agreement of 5 years. After 5 years Machinery will send back to Origin. And there is no commercial value involved, only we will pay Lease amount yearly.

In this case, what is procedure and documents are required for Customs clearance ???

Do we need to pay Customs Duties??

Any duty exemption schemes are available ???

Please share your valuable suggestions.

AI Summary

Customs valuation on leased machinery: lease charges are assessable value; duties and IGST must be paid, with possible ITC.
Lease payments for imported machinery constitute the assessable value for customs; customs duty, cess and IGST are payable, with IGST potentially claimable as input tax credit. The import declaration must state the lease nature, include correct HS classification and IEC, and customs may require a bond or bank guarantee to secure re export. The lease agreement and remittances must comply with FEMA/RBI rules and be routed through authorised dealers; check preferential trade treatment for any concession. Where IGST is paid on lease consideration, exemption or ITC may render treatment revenue neutral.