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Facility for suo moto payment of customs duty in case of bona fide default in export obligation under Advance / EPCG authorisations – reg.

Circular No. 11/2015 - Customs Dated 1st April, 2015 The Ministry has considered the issue of increased interest cost for authorization holders (AH) who come forward to the Regional Authority (RA) of DGFT for regularization of their cases of bona fide default in export obligation (EO) under the Advance Authorization or EPCG Schemes but have to wait for the detailed calculations in this regard before being able to deposit the duty involved.

CBEC vide Circular No. 11/2015- Cus., Dated: April 01, 2015 has provided a procedure to enable quicker payment of duty to curb the issue of increased interest cost for authorization holders (AH)who come forward to the Regional Authority (RA) of DGFT for regularization of their cases of bona fide default in export obligation (EO) under the Advance Authorization or EPCG Schemes but have to wait for the detailed calculations in this regard before being able to deposit the duty involved.

Under this procedure,the application must show, inter alia, the AH’s own/selfcalculation of the duty payable for the default in EO and interest thereon. During pendency of detailed calculation by the RA, AH may;

(i) Deposit, in cash, the own/self-calculated duty amount, along with interest in cash by challan (showing relevant particulars) in the designated bank at the port where the authorization is registered. One copy of the paid challan shall be submitted to the Customs Authority at the said port which shall update its records; and/or

(ii) Produce valid duty credit scrip before the Customs Authority at the port where the authorization is registered for debit of the own/self-calculated duty amount. The debit shall only be in respect of goods that are permitted to be imported under the relevant scrip. However, the AH shall pay the interest in cash in the designated bank at the port where the authorization is registered. One copy of the paid challan shall be submitted to the Customs Authority at the said port which shall update its records.

On receipt of the excess import letter issued by RA after its detailed calculations, the Customs would confirm the actual amount of duty payable for the default in EO and interest thereon. On receipt of the redemption from RA, the Customs Authority shall reconcile and initiate the prescribed actions for releasing the Bond / BG.

Circular No.  11/2015 – Customs

Dated 1st April,  2015

Subject : Facility for suo moto payment of customs duty in case of bona fide default in export obligation under the Advance / EPCG authorisations – reg.

         The Ministry has considered the issue of increased interest cost for authorization holders (AH) who come forward to the Regional Authority (RA) of DGFT for regularization of their cases of bona fide default in export obligation (EO) under the Advance Authorization or EPCG Schemes but have to wait for the detailed calculations in this regard before being able to deposit the duty involved. It was decided to provide for a procedure that would enable quicker payment thereby reducing the avoidable interest cost for such exporters.

2.      After consulting the DGFT, and certain field formations, the Board prescribes the following facilitation procedure –

(a)       This procedure may be adopted by an AH who has obtained acknowledgement from the concerned RA of its application for regularization of bona fide default in EO. The application must show, inter alia, the AH’s own/self-calculation of the duty payable for the default in EO and interest thereon.

(b)       During pendency of the detailed calculations by the RA, such an AH may –

(i)         Deposit, in cash, the own/self-calculated duty amount, along with interest in cash by challan (showing relevant particulars) in the designated bank at the port where the authorization is registered. One copy of the paid challan shall be submitted to the Customs Authority at the said port which shall update its records; and/or

(ii)        produce valid duty credit scrip before the Customs Authority at the port where the authorization is registered for debit of the own/self-calculated duty amount. Such scrip should be one issued under Chapter 3 (excluding SHIS, SFIS and AIIS scrips) in terms of FTP (2009-14) or chapter 3 of FTP (2015-20) or be a Post-export EPCG duty remission scheme scrip. The debit shall only be in respect of goods that are permitted to be imported under the relevant scrip. The Customs Authority shall reflect the debit in Customs records and also suitably endorse it on the scrip. However, the AH shall pay the interest in cash in the designated bank at the port where the authorization is registered. One copy of the paid challan shall be submitted to the Customs Authority at the said port which shall update its records.

(c)       On receipt of the excess import letter issued by RA after its detailed calculations (indicating inter alia the reported duty deposited/debited and interest paid on self/own calculation basis, if any), the Customs would confirm the actual amount of duty payable for the default in EO and interest thereon and, taking into account the actual deposits/debits already made, would indicate the balance duty etc., if any. The AH shall pay these by the above modes and the Customs Authority shall endorse all the paid challan(s).

(d)       On receipt of the redemption letter (indicating, inter alia, details of payments including amount and mode) from RA, the Customs Authority shall reconcile and initiate the prescribed actions for releasing the Bond / BG.

3.      This facilitation procedure may be put in place and publicized through suitable Trade/ Public Notice and officers guided through Standing Order. Difficulties faced, if any, in implementation of the circular may be brought to the notice of the Board.

F.No. 605/55/2014-DBK

Yours faithfully,

(Sanjay Kumar)

Under Secretary (DBK)

Tele: 23341480

Categories: Custom Duty
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