customs duty on goods physically not imported

[kothapally Raji Reddy]

Sir

Is there an obligation on a company to pay customs duty on the machinery bought in country X with the approval from RBI in terms of the provisions of FEMA to buy  machinery and lease out the said machinery in that country namely X itself wihout physicaly brinhing the machinery into the country. Pl advise with relevant provisions.

[Surender Gupta]

As per the provisions of Customs, duty is liable to paid when goods are imported i.e. bringing into India or exported i.e taken outside India. In your case, goods are not imported into India and therefore, customs duty is not leviable. However, if there is any condition is put by the RBI under FEMA, you need to comply with the same.

[DR.MARIAPPAN GOVINDARAJAN]

Very thanks for the information even though I have belatedly see it.

AI Summary

Customs duty applies only on physical importation; no duty where goods remain abroad but FEMA conditions may apply. Customs duty is triggered by physical importation into India; machinery bought abroad and remaining outside India does not attract customs duty, but any conditions imposed under FEMA or by the Reserve Bank must still be complied with.