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Circular No. 60/2000-Cus

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

New Delhi, the 12TH July, 2000

Subject – Customs duty on share certificates imported for sale or dematerialization

I am directed to refer to the subject mentioned above and to say that a representation has been received from the Stock Exchange, Mumbai stating that the Customs authorities are insisting on payment of Customs duty when shares held by NRIs abroad are re-imported for sale or dematerialization. It has been stated that presently the NRIs are allowed to invest in India shares and hold them overseas. Earlier, their shares were exported on specific approval of the RBI, but now this requirement has been waived. These shares are occasionally sent back to India for purposes of selling/dematerialization through Postal route or courier/valuable cargo. The issue raised by the Stock Exchange, Mumbai is whether customs duty is payable on importation of such shares.

2. The matter has been examined. Prima facie, all goods which are exported from India and subsequently re-imported would be liable to duty and would be subject to all the conditions and restriction as applicable to goods of the kind and value when imported, as per section 20 of the Customs Act. However, under notification No. 94/96-Customs, dated 16-12-1996, exemption has been provided to certain categories of goods of Indian origin, when they are re-imported into India. This is,. of course, subject to fulfillment of certain conditions as specified in the said notification.

3. The basic principle underlining the notification is that as long a no export benefits were claimed at the time of export on any goods, they can be re-imported without payment of customs duty; The exemption under the notification  would be available if the goods have not undergone any processing or alteration abroad. As it is evident that the goods, namely, share certificates could not have undergone any change or reprocessing after export, exemption as provided under notification No. 94/96-Cus., would be available, if such goods are re-imported within the stipulated period

4. The Custom  Houses may finalize pending provisional of assessments, if any on the basis of above instructions. Difficulties faced, if any in the implementation of the said instructions may be brought to the notice of the Board at an early, date.

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