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Relief to EOU from Prior Approval for import without payment of duty

Relief to EOU from Prior Approval for import without payment of duty

 

 

Relief to EOU from Prior Approval for import without payment of duty

 

Difficulties faced on imports by EOU/EHTP/STP/BTP without payment of duty has been relieved with respect to the requirement of prior approval to be received from the Jurisdictional DC/AC of Customs vide Circular No. 10/2018 Customs dated 24.04.2018.

As we all know that EOUs can import the goods without payment of duty. Earlier in Central Excise regime also, EOU were procuring procurement certificate from the local range office and submitted the same to custom office for import at nil rate of duty. But with the introduction of GST, it was provided that only BCD exemption is available to EOU and they have to pay IGST and import the goods. EOU can take the credit on the same.

Later on the Government relaxed the provision and even IGST exemption was extended to EOU till March 31, 2017 vide notification number 78/2017-Customs dated 13th October 2017. The time limit for claiming exemption from payment of IGST was further extended to 1st October 2018 by notification number 33/2018-Customs dated 23-03-2018.

To import the goods by EOU, there is no requirement to take procurement certificate. It was provided to follow the Customs (Import at Concessional Rate of Duty) Rules, 2017. Now the application for these rules is to be made to Customs authorities. Earlier the jurisdiction of the custom formation was not defined. Hence, the Central Excise office was given the power under the impugned rules to issue annexure. From April 1, 2018 the bond of EOUs was transferred to custom authorities. Henceforth, they will be governing these rules for EOU.

For import of goods at nil rate of duty by EOU under aforesaid rules, they have to make an application to jurisdictional custom authorities and a copy of the same was given to custom authorities at port. These Rules provided that port authority will allow the import on intimation of such application to importer EOU. But the port custom authorities insisted on approval of application by jurisdictional custom authorities so that they can ensure that the amount is debited in bond maintained by them. However, there was no such requirement in the Rules. This circular has clarified the position only.

This circular states that the EOU’s are required to submit the information in duplicate regarding estimated quantity and value of goods to be imported to Jurisdictional DC/AC of Customs. One set is also required to be submitted to DC/AC of the Customs at Custom Station of importation who shall allow the benefit of Exemption Notification to the importer on the basis of the information provided.

It is further being prescribed that Jurisdictional DC/AC of Customs shall ensure that the intimation received is properly scrutinized, so that only the eligible goods are imported duty free. After scrutiny at the customs, one copy shall be forwarded to the DC/AC at the customs station of importation who would reconcile the goods imported with the Bill of Entry. Thus there is no prerequisite of prior approval from the Jurisdictional DC/AC of the Customs.   

This is welcome step by CBIC to clarify the position. EOU can easily import the goods at concessional rate of duty.

But now the EOU has to pursue one more authority for their work. Earlier also they are governed by two authorities viz. Central Excise office under Ministry of Finance and Development Commissioner of Export Processing zone falling under Ministry of Commerce. Now, import and export related work will be handled by custom authorities. GST related work will be handled by CGST or SGST authorities. Development commissioner has overall control of working of EOU.

The content of this GST update is for educational purpose only and not intended for solicitation.

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Thanking you,

Regards,

         

Pradeep Jain, F.C.A.

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