It has been noticed that the customs department was insisting to furnish the Bank Guarantee from 100% EOU units by virtue of circular no. 48/2017 Customs dated 8th Dec 2017. However, Foreign Trade Policy 2015-20 provides reverse view as below.
“Unit will not be required to furnish bank guarantee at the time of import or going for job work in DTA, where:
(i) The unit has turnover of Rs. 5 crore or above;
(ii) The unit is in existence for at least three years; and
(iii) The unit:
(1) has achieved positive NFE / export obligation wherever applicable;
(2) has not been issued a show cause notice or a confirmed demand, during the preceding 3 years, on grounds other than procedural violations, under the penal provision of the Customs Act, the Central Excise Act, the Foreign Trade (Development & Regulation) Act, the Foreign Exchange Management Act, the Finance Act, 1994 covering Service Tax or any allied Acts or the rules made thereunder, on account of fraud / collusion / willful mis-statement / suppression of facts or contravention of any of the provisions thereof.”
By virtue of Para 6.12 (d) of FTP 2015-20, 100% EOU need not to furnish the Bank Guarantee subject to fulfillment of conditions stipulated. In view of above Customs circular no. 48/2017 Customs dated 8th Dec 2017 does not have clarity on furnishing the Bank Guarantee by 100% EOU units.
Therefore, industries have represented the case before Jurisdictional customs office and the Central Board of Indirect Taxes and Customs “CBIC”. The representation has been reviewed by CBIC and issued clarification in favour of 100% EOU specifically mentioning “it is reiterated that waiver of bank guarantee/ surety to EOUs would continue to be governed by various circular issued from time to time by CBIC with regard to B-17 bonds executed by EOUs and will not be guided by the Circular no. 48/2017-Customs dated 08.12.2017 which governs the general importers and not the EOUs. need not furnish the Bank Guarantee for imports.”
This major clarification may help industries having their units in 100% EOU.