Reversal of custom duty for selling goods from EOU to merchant exporter

[Dashrath Walkoli]

Sir, we are a EOU unit and selling goods to merchant. Whether reversal of custom duty is required, since as per chapter 7 of FTP, merchant exporter is not covered as deemed export?

AI Summary

Export Oriented Unit must reverse custom duties when selling goods to merchant exporters as they're not deemed exports An Export Oriented Unit inquired whether custom duty reversal is required when selling goods to a merchant exporter. Two responses clarified that since merchant exporters are not covered under deemed exports per Foreign Trade Policy Chapter 7, duty reversal is mandatory. When goods are cleared to Domestic Tariff Area units, such clearances are treated as domestic sales requiring reversal of Basic Customs Duty, Countervailing Duty, and other applicable duties that were originally exempted under the EOU scheme.