We at a DTA (trading unit) import steel cylinders from a manufacturing unit in a Special Economic Zone (SEZ) and sell locally and inter-state. While importing from the SEZ unit we pay Customs duty, CVD and Special Additional Duty (SAD) @ 4 per cent. On re-sale from the trading unit we pass on the excise duty (i.e., the equivalent amount of CVD) and charge VAT/CST as applicable to our customers, mentioning on the invoice that “No Credit of the additional duty of Custom levied under sub-section(5 )of section 3 of the Custom Tariff Act,1975 shall be admissible.” Customs exemption notification no. 102/2007 dated October 14, 2007, allows refund of 4 per cent SAD in cases where the imported goods are resold on payment of sales tax (ST) or value added tax (VAT) under an invoice that clearly states that no Cenvat Credit of the said duty shall be admissible. Accordingly, we have filed our refund application. However, the Customs authority at the SEZ is not sanctioning the refund and wants some precedent (refund orders from some other SEZ). Please guide us on how to proceed and get the refund.
Most DTA buyers pay VAT on purchases from SEZs and do not pay 4 per cent SAD because goods cleared from a SEZ are exempted from payment of 4 per cent SAD (if the goods are not exempted by state governments from sales tax or VAT) under notification no. 45/2005-Cus dated 16th May 2005. Even those who pay 4 per cent SAD may be passing on the duty to buyers who can take Cenvat Credit of the same. So, it is unlikely that your authorities can find precedents easily. So, you may insist that they must quickly grant the refund or reject the claim, so that you can go on appeal. In case of undue delay, you may follow the grievance redress procedure and ask for quick disposal of the case.
Can we clear/sell/remove excisable goods immediately after online registration is completed and Central Excise registration number is received (even before physical/Online Digital Certificate in original is pending/not received)?
Yes. CBEC Instruction no. 332/12/2011-TRU dated 4.9.2011 specifically deals with this question and says that the excisable goods can be removed from the factory or the warehouse immediately after the Central Excise registration number is received.
I receive remittances from my son abroad, part of which I sometimes keep in an Exchange Earners Foreign Currency (EEFC) Account. Can I make my wife a joint account-holder in the EEFC account?
Yes. She can become a joint account-holder but, she cannot operate the account during your lifetime. The Reserve Bank’s AP(DIR) Circular no. 15 dated 15.09.2011 says that resident individuals may be permitted to include resident close relative(s) as defined in the Companies Act, 1956 as a joint holder(s) in their EEFC/RFC bank accounts on ‘former or survivor’ basis. However, such resident Indian close relative, now being made eligible to become joint account-holder, shall not be eligible to operate the account during the lifetime of the resident account holder.
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