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    NewsBills
    AMENDMENTS IN THE GST (Compensation to States) Act, 2017
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    Regularisation of cess shortfalls where non levy arose from general practice allows government to sanction corrective levy.
    Section 8A empowers the government to regularize cases of non-levy or short-levy of the compensation cess where such under-collection arose from a prevailing general practice, providing an administrative mechanism to treat practice-driven cess shortfalls as regularizable liabilities under the GST compensation framework.
    Case LawsIncome Tax
    Court Upholds Deduction for Operational Hotel under Section 35AD Despite Administrative Delays
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    Deduction eligibility for operational hotels affirmed despite administrative delay in star classification, focusing on substantive compliance.
    The court addressed entitlement to a deduction under Section 35AD(5)(aa) where a hotel began operations and generated income in the relevant year and a timely application for star classification was submitted, but formal certification was delayed due to administrative inspections; the court applied a purposive construction to allow the deduction when substantive operational conditions were satisfied and delay was not the assessee's fault.
    Case LawsIncome Tax
    Landmark Ruling: Leasing Businesses Entitled to Depreciation Benefits
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    Depreciation entitlement for leasing companies where contractual ownership and business use are established, allowing higher depreciation rates.
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    Case LawsIncome Tax
    Court Decision on Convertible Debentures Expenses : Revenue or Capital Expenditure?
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    Revenue classification of debenture issuance expenses upheld as revenue expenditure despite later conversion into equity.
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    Case LawsIncome Tax
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    Classification of feasibility study costs: expansion-related studies without new assets qualify as revenue expenditure.
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    Case LawsIncome Tax
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    Section 43B actual-payment requirement prevents deduction of unutilised MODVAT credit and sales tax recoverable balances.
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      Customs

      Export Obligation Compliance: Detailed SOPs for EPCG and Advance Authorization Holders

      8 February, 2024

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      Circular No. PUBLIC NOTICE NO. 01/2024 - Dated: 22-1-2024 - Standard Operating Procedures (SOP) regarding monitoring of Export obligation fulfilment under EPCG and Advance authorization scheme-Reg.

      The present public notice has issued a new set of guidelines aimed at streamlining the process for monitoring the fulfillment of export obligations under the Export Promotion Capital Goods (EPCG) and Advance Authorization schemes. This note tried to present a simplified explanation of the procedures and requirements outlined in Public Notice No. 01/2024, dated 22 January 2024.

      Key Points of the Notice

      1. Export Obligation Monitoring Cell (EOMC): Established to oversee the fulfillment of export obligations under the EPCG and Advance Authorization schemes. These schemes are designed to support exporters by allowing duty-free import of capital goods and inputs, subject to certain conditions and export obligations.

      2. Conditions for EPCG and Advance Authorization Schemes:

        • EPCG Scheme: Importers must submit an installation certificate for capital goods within six months of import. For spare parts, the deadline is three years. The authenticity of certificates issued by Chartered Engineers will be randomly verified.
        • Advance Authorization Scheme: Allows duty-free import of inputs used in export products, subject to export obligations.

      3. Export Obligation Fulfillment: Exporters must meet their export obligations within specified timelines or request extensions. Failure to meet obligations requires payment of proportional duties and interest.

      4. Monitoring and Compliance: The notice outlines procedures for monitoring compliance, including:

        • Issuance of notices to defaulters.
        • Interaction with the Directorate General of Foreign Trade (DGFT) and Regional Authorities.
        • Enforcement actions, including bond or bank guarantee execution and penalty imposition for non-compliance.

      5. Legal Implications: Non-fulfillment of export obligations may lead to confiscation of goods and penalties under the Customs Act, 1962.

      6. Communication and Reporting: Importers and customs brokers are encouraged to report difficulties in implementation via email to the Principal Commissioner of Customs.

      Conclusion

      This public notice aims to ensure compliance with export obligations under the EPCG and Advance Authorization schemes, facilitating trade and ensuring the proper use of concessions provided to exporters. It establishes clear procedures for monitoring, compliance, and enforcement, aiming to streamline operations and support the trade community.

      For Further Communication

      Trade associations, importers, and customs brokers are encouraged to disseminate this information among their members and constituents. Any difficulties or queries regarding the implementation of these procedures should be communicated to the Principal Commissioner of Customs at the provided email address.

       

      Full Text:

      Circular No. PUBLIC NOTICE NO. 01/2024 - Dated: 22-1-2024 - Standard Operating Procedures (SOP) regarding monitoring of Export obligation fulfilment under EPCG and Advance authorization scheme-Reg.

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