sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Customs and Excise »
 Central Board of Excise and Customs to be renamed CBIC by April
 Central Board Of Excise & Customs New Delhi GST Flyers
 Hike in customs duty on electronics likely to boost revenue collection
 Customs duty raised on electronic goods
 Ministry Of Finance (Central Board Of Direct Taxes) Notification
 Refund of IGST paid on export of goods under rule 96 of CGST Rules,2017
 Customs And Central Excise Drawback – Part II
 Customs Valuation (Determination of Value of Imported Goods) Rules 2007
 Amendment to Customs Valuation Rules – Notification No. 91/2017 (NT)
 GST on Custom House Agents
 The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes

CBEC should look into Customs law amendment
March, 29th 2010

The Central Board of Excise and Customs (CBEC) has issued a very useful Circular (number 6/2010-Cus dated March 19, 2010) re-iterating its earlier instructions that rebate of excise duty paid on goods supplied from domestic tariff area (DTA) to a special economic zone (SEZ) should be granted under Rule 18 of the Central Excise Rules, 2002.

The Circular should not have been necessary at all. Supplying goods, or providing services, from the DTA to a unit or developer in SEZ is defined as export under Section 2(m) of the SEZ Act, 2005. Section 26(c) of the said Act exempts excise duty on goods supplied from DTA to an SEZ unit or developer. Section 51 gives overriding effect to the provisions of the SEZ Act over any other law. Rule 30 of the SEZ Rules, 2006, details the procedure for excise duty-free clearance of goods from DTA to SEZ. CBEC Circular (no. 29/2006-Cus. dated December 2, 2006) had clarified that supplies from DTA to SEZ shall be eligible for claim of rebate under Rule 18 of Central Excise Rules, 2002.

In spite of such clear provisions and instructions, some field formations had been denying excise rebate on the grounds that rebate under Rule 18 of the Central Excise Rules, 2002 read with Notification 19/2004- CE (NT) dated September 6, 2004, is admissible only when the goods are exported out of India and not when supplies are made to an SEZ. CBECs latest circular categorically states that the settled position that rebate is admissible for supplies made from a DTA to SEZ does not warrant any change even if Rule 18 does not mention such supplies in clear terms and that the field formations are required to follow the said Circular number 29/2006.

In another Circular (number 7/2010-Cus dated March 23, 2010), CBEC has clarified that duty drawback would not be payable in cases where export proceeds have not been realised in accordance with the provisions of the Foreign Exchange Management Act, 1999, even if the claim has been settled by the Export Credit and Guarantee Corporation (ECGC) or realisation waived by the Reserve Bank of India (RBI) and that action should be taken for recovery of drawback amount in such cases.

The Foreign Trade Policy (FTP) provides that claims settlement by ECGC would count for benefits under FTP, even if payment for exports is not realised from buyers abroad. Similarly, FTP says that realisation of export proceeds shall not be insisted under any of the export promotion schemes under FTP, if RBI writes off the requirement of realisation of export proceeds on merits and the exporter produces a certificate from the concerned foreign mission of India about the fact of non-recovery of export proceeds from the buyer.

CBEC says that FTP provisions would not be applicable to the drawback scheme, since the drawback scheme is governed by the provisions of the Customs Act, 1962, and the Rules made there under clearly provide that drawback should be recovered if sale proceeds have not been realised.

The merit of the CBEC circular is that it clarifies the legal position beyond doubt. However, CBEC must consider whether the Customs law needs suitable amendment to give treatment similar to FTP allowing drawback against ECGC claim settlement or RBI-specific waiver, even in situations when the exporter fails to realise payments from the buyer.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions