I refer to Para 2.35(b) of Foreign Trade Policy, which prescribes 15 per cent value addition for export of imported goods to notified countries against payment in Indian rupees. Please let me know how this value addition will be calculated and monitored, and whether commission can be paid against the exports? Are there any Customs notifications regarding the same and whether any processing needs to be done before processing?
In my opinion, the FoB value of exports must be 15 per cent more than the CIF rupee value of imports. The monitoring must be done by the Customs who assess your shipping bill. There is no bar against payment of commission against such exports. There is no notification of Customs on this issue. The said Para 2.35(b) refers to export of imported goods and so, no processing is necessary.
We have procured our inputs from domestic sources against invalidation of our advance authorisation. We are unable to utilise the goods for export and fulfil our export obligation. Are we required to pay customs duties or excise duties and if so, to whom?
As per para 4.28 of the Handbook of Procedures, Vol. 1 (HB-1), you have to pay to customs authorities, customs duty on unutilised value of imported/indigenously procured material along with interest as notified. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB. So, you may pay notional customs duties on the FOR value of goods to the Customs at the port of registration.
Our payment terms for exports envisage retention money of 20 per cent that will be paid after buyer's satisfaction regarding proper functioning of the equipment we have supplied. We do not want to defer our claims under Focus Market Scheme till realisation of full money. Can we now make a claim for 80 per cent that we realise now and file a supplementary claim when we get the balance 20 per cent?
Yes. As per Para 9.4 of HB-1, wherever any application for supplementary claim is received, within specified time limits, such application may also be considered after imposing a cut at the rate of two per cent on the entitlement. A better option would be for you to make the full claim immediately by furnishing legal agreement/undertaking and bank guarantee in the formats prescribed at Appendix 25-D and 25-C of HB-1 and abide by the procedures prescribed at Para 3.11.12 and 3.11.13 for monitoring and regularisation.
For re-export of imported goods in bonded warehouse, what procedure we have to follow?
As per Section 69 of the Customs Act, 1962, you have to file a shipping bill or bill of export or label or declaration accompanying the goods (for exports by post) and pay the export duty, penalties, rent, interest and other charges payable in respect of such goods. You can move the goods to the gateway port/airport/foreign post office after the officer at the bonded warehouse makes an order for clearance of such goods for exportation.
In my opinion, the FoB value of exports must be 15 per cent more than the CIF rupee value of imports. The monitoring must be done by the Customs who assess your shipping bill. There is no bar against payment of commission against such exports. There is no notification of Customs on this issue. The said Para 2.35(b) refers to export of imported goods and so, no processing is necessary.
We have procured our inputs from domestic sources against invalidation of our advance authorisation. We are unable to utilise the goods for export and fulfil our export obligation. Are we required to pay customs duties or excise duties and if so, to whom?
As per para 4.28 of the Handbook of Procedures, Vol. 1 (HB-1), you have to pay to customs authorities, customs duty on unutilised value of imported/indigenously procured material along with interest as notified. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB. So, you may pay notional customs duties on the FOR value of goods to the Customs at the port of registration.
Our payment terms for exports envisage retention money of 20 per cent that will be paid after buyer's satisfaction regarding proper functioning of the equipment we have supplied. We do not want to defer our claims under Focus Market Scheme till realisation of full money. Can we now make a claim for 80 per cent that we realise now and file a supplementary claim when we get the balance 20 per cent?
Yes. As per Para 9.4 of HB-1, wherever any application for supplementary claim is received, within specified time limits, such application may also be considered after imposing a cut at the rate of two per cent on the entitlement. A better option would be for you to make the full claim immediately by furnishing legal agreement/undertaking and bank guarantee in the formats prescribed at Appendix 25-D and 25-C of HB-1 and abide by the procedures prescribed at Para 3.11.12 and 3.11.13 for monitoring and regularisation.
For re-export of imported goods in bonded warehouse, what procedure we have to follow?
As per Section 69 of the Customs Act, 1962, you have to file a shipping bill or bill of export or label or declaration accompanying the goods (for exports by post) and pay the export duty, penalties, rent, interest and other charges payable in respect of such goods. You can move the goods to the gateway port/airport/foreign post office after the officer at the bonded warehouse makes an order for clearance of such goods for exportation.
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