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 Not Applicable on Machinery Leased Abroad Without Import to India; RBI FEMA Compliance Required. A query was raised about the obligation to pay customs duty on machinery purchased in a foreign country, with approval from the Reserve Bank of India (RBI) under FEMA provisions, when the machinery is leased out in the same foreign country without being physically imported into India. The response clarified that customs duty is applicable only when goods are imported into or exported from India. Since the machinery is not brought into India, customs duty does not apply. However, compliance with any RBI conditions under FEMA is necessary.