This is regarding ‘when to pay the revenue deposit/extra duty deposit’ amount in case of imports by related parties. We plan to warehouse the imported consignments/goods ‘in bond’ and later pay the duty amount as and when we clear the goods from the bonded warehouse. Are we required to pay the revenue deposit/extra duty deposit at the time of warehousing, or at the time of clearance? In other words, are we required to deposit the amount at the time of ‘in-bond’ or at the time of ‘ex-bond’ of the material? We would be glad if you can provide any reference of notification from customs on this point.
You have to pay the deposit before the goods are cleared from gateway customs. The point is that valuation is done at the gateway customs, before warehousing. Section 14 of the Customs Act, 1962 refers to value at the time and place of importation. In case of related party transactions, if the matter is to be referred to Special Valuation Branch to determine whether the relationship has influenced the price, goods are released against provisional assessment and revenue deposit of 1 per cent or extra duty deposit of 5 per cent. Once that valuation is done at the place of importation, the value is not to be re-determined after warehousing.
CBEC has confirmed this point in its Circular no. 11/2010-Cus dated 3.6.2010. Since the valuation is an issue that is dealt with at the gateway customs and revenue deposit or extra deposit relates to valuation, the deposit of the amount must be at the gateway customs before the goods are allowed to be warehoused — i.e., before the in-bond bill of entry is passed. You don’t need any specific notification on this point and there isn’t any from the Customs.
One of my clients, who has constructed a new hotel, wants to import air conditioners, furniture and other articles from outside India. He wants to take Export Promotion Capital Goods (EPCG) authorisation for the purpose of saving Customs Duty. I want to know that whether he can take EPCG authorisation and, if yes, what is the procedure for this?
As per Para 5.2 and 5.3 of the Foreign Trade Policy (FTP), service providers can obtain EPCG authorisations for import of capital goods and spares at 3 per cent duty subject to export obligation of eight times the duty saved to be fulfilled in eight years. As per Para 5.2 of the Handbook of Procedures, Vol.1(HBP v1) an application for grant of EPCG authorisation may be made to the Regional Authority concerned in the form ANF 5A along with the documents prescribed therein.
For regularisation of default under advance authorisation, are we required to pay interest at 18 per cent as per the notification no. 17/2011-Customs (NT) dated 1.3.2011?
You may pay interest at 15 per cent per annum, the rate prescribed in the exemption notifications relating to advance authorisations. The 18 per cent rate is for the purposes of Section 28AA of the Customs Act, 1962 for delayed payment of duty.
