Custom act 1962,FTP 2023-24 I took advance license under notification 21/2023 for physical export

[Dinesh kumar]

Can I eligible for BG exemption under Public Notice 140/2016-Custom if I am merchant exporter and have turnover of more than 5cr to EOU unit ? Para (A) Table 3.1 of PN 140/2016 or Circular 58/2004 says for physically export.

[Ryan Vaz]

Applicable Law / Circulars

• Public Notice No. 140/2016-Customs, Table 3.1(A) – CBEC (now CBIC)

• CBEC Circular No. 58/2004-Cus., dated 21.10.2004

• FTP 2015–20 / HBP – provisions on deemed exports

• Customs Act, 1962 – bond/BG execution

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Short Practical Answer

No.
A merchant exporter supplying to an EOU is not eligible for BG exemption under Para (A) of Table 3.1 of PN 140/2016, even if turnover exceeds ?5 crore, because the exemption is restricted to physical exports only, not deemed exports.

AI Summary

BG exemption limited to physical exports; merchant exporters supplying EOUs are not eligible when supply is deemed export. The exemption from executing a bank guarantee under PN 140/2016 Table 3.1(A) is limited to physical exports; supplies to an EOU that constitute deemed exports do not qualify, so a merchant exporter supplying an EOU is not eligible for the BG exemption despite meeting turnover thresholds.