Under the Export Promotion Capital Goods (EPCG) scheme, what is the consequence if we cannot maintain even the stipulated annual average exports in a particular year? Secondly, can we club our exports with that of a group company to achieve the annual average? Thirdly, how is the duty to be paid and can we take Cenvat Credit of the duty paid?
If you do not export enough in a particular year to even maintain the stipulated annual average exports against an EPCG authorisation, you will not have any shipping bill to offer towards discharge of the specific export obligation against the authorisation in that year. The Foreign Trade Policy is silent on the consequences of not exporting enough to maintain annual average exports. In my opinion, there are no consequences. The exports made by your group company enter the picture when you want their exports of the same or any other product to count towards the export obligation. In that case, the group company has to maintain its annual average exports and any exports made by the group company in excess of the annual average can count towards the specific export obligation against the EPCG authorisation. But, there is no provision to count the exports of a group company towards the annual average exports stipulated for you against your EPCG authorisation. In case of default, you can pay the duty to the Customs through a challan and that is a valid document for taking Cenvat Credit.
We are removing consignments for exports without duty payment, but in a number of trucks by making a single invoice and corresponding ARE1. The objection raised by the Customs / Excise authority is that each consignment vehicle should have a separate invoice. This adds to our paper work. We request information on the correct system to be followed.
The Central Board of Excise and Customs (CBEC) had issued Circular no. 25/86/96-CX, dated 16.10.1996, prescribing the procedure for dispatch of one consignment in more than one vehicle. The procedure envisages prior intimation to your excise authorities, preparing a parent invoice quoting all vehicle numbers, total value/duty of the consignment, preparing an inventory (giving detailed item-wise description as loaded in different vehicles) that should be annexed to the invoice, preparing subsidiary invoice for each vehicle quoting the parent invoice reference etc.
We had opened a letter of credit (LC) for imports. The supplier shipped the goods and presented documents to the negotiating bank but the documents were lost in transit, later. Our bank says that we must pay up even if we do not get the documents. Is that correct?
As per Article 35 of the Uniform Customs and Practices for Documentary Credits, 2007 Revision, if the negotiating bank determines that a presentation is complying and forwards the documents to the issuing bank, the issuing bank must reimburse even when the documents have been lost in transit. So, you have to pay up.
