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'Unused imported raw material may be sold by EOUs in DTA'

SME Chatroom | TNC Rajagopalan

TNC Rajagopalan 

I refer to your earlier Q&A stating that trading is not permitted for EOUs. Can an EOU make DTA sale of raw material imported/indigenously procured duty free, if they remain un-utilised due to any reason, such as reduction in export orders?

Yes. As per Para 6.15 (a) (ii) of the FTP, in case an EOU/EHTP/STP/BTP unit is unable to utilise goods and services, imported or procured from DTA, it may be disposed of in DTA with the approval of Customs authorities on payment of applicable duties and submission of import authorisation.

As per Para no. 4 of the notification 52/2003-Cus and Para no. 8 of 22/2003-CE both dated March 31, 2003, the said officer may, subject to such conditions and limitations as he may deem fit to impose under the circumstances of the case for the proper safeguard of revenue interest and also subject to such permission of the Development Commissioner or the Board of Approval or the Inter Ministerial Standing Committee as the case may be, wherever it is specially required under the Foreign Trade Policy, allow the unit to clear any of the said goods for being taken outside the unit, to any other place in India or to de-bond in accordance with the Foreign Trade Policy.   

We are education consultants based in India. We send students for higher study abroad. We get commissions in foreign exchange from foreign universities. Do we come under service tax?

The service you provide is that of an intermediary, in the sense that you act as an agent for the foreign university and get commission for selling their services. That service is not in the negative list and not covered under any exemption notification. As per Rule 9 (c) of Place of Provision of Service Rules, 2012, the place of provision of intermediary service is the location of the service provider. So, the service is taxable. 

We have made several exports in discharge of our export obligation against advance authorisation. We have not got any payment against one shipment and only part payment against another. Even so, we meet the 15 per cent value addition stipulation. In such a situation, can we include these shipments in our statement seeking discharge of export obligation?

As per the Reserve Bank of India’s directives, an exporter who has not been able to realise the outstanding export dues despite best efforts can seek write off of the unrealised portion subject to the fulfilment of stipulations regarding surrender of proportionate incentives. So, logically, you should not count the quantity of exports proportionate to the unrealised part of export dues, unless the case is covered under Para 2.85 or Para 2.87 of the Handbook of Procedures, Vol.1.

Can we import used car parts without a licence?

No. Para 2.31 of the FTP allows import of second-hand capital goods (except computers, photocopiers, air conditioners and diesel generating sets) and reconditioned/refurbished parts of capital goods without authorisation. For import of other used goods, you need an authorisation. 

Business Standard invites readers’ queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in

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'Unused imported raw material may be sold by EOUs in DTA'

SME Chatroom | TNC Rajagopalan

SME Chatroom | TNC Rajagopalan
I refer to your earlier Q&A stating that trading is not permitted for EOUs. Can an EOU make DTA sale of raw material imported/indigenously procured duty free, if they remain un-utilised due to any reason, such as reduction in export orders?

Yes. As per Para 6.15 (a) (ii) of the FTP, in case an EOU/EHTP/STP/BTP unit is unable to utilise goods and services, imported or procured from DTA, it may be disposed of in DTA with the approval of Customs authorities on payment of applicable duties and submission of import authorisation.

As per Para no. 4 of the notification 52/2003-Cus and Para no. 8 of 22/2003-CE both dated March 31, 2003, the said officer may, subject to such conditions and limitations as he may deem fit to impose under the circumstances of the case for the proper safeguard of revenue interest and also subject to such permission of the Development Commissioner or the Board of Approval or the Inter Ministerial Standing Committee as the case may be, wherever it is specially required under the Foreign Trade Policy, allow the unit to clear any of the said goods for being taken outside the unit, to any other place in India or to de-bond in accordance with the Foreign Trade Policy.   

We are education consultants based in India. We send students for higher study abroad. We get commissions in foreign exchange from foreign universities. Do we come under service tax?

The service you provide is that of an intermediary, in the sense that you act as an agent for the foreign university and get commission for selling their services. That service is not in the negative list and not covered under any exemption notification. As per Rule 9 (c) of Place of Provision of Service Rules, 2012, the place of provision of intermediary service is the location of the service provider. So, the service is taxable. 

We have made several exports in discharge of our export obligation against advance authorisation. We have not got any payment against one shipment and only part payment against another. Even so, we meet the 15 per cent value addition stipulation. In such a situation, can we include these shipments in our statement seeking discharge of export obligation?

As per the Reserve Bank of India’s directives, an exporter who has not been able to realise the outstanding export dues despite best efforts can seek write off of the unrealised portion subject to the fulfilment of stipulations regarding surrender of proportionate incentives. So, logically, you should not count the quantity of exports proportionate to the unrealised part of export dues, unless the case is covered under Para 2.85 or Para 2.87 of the Handbook of Procedures, Vol.1.

Can we import used car parts without a licence?

No. Para 2.31 of the FTP allows import of second-hand capital goods (except computers, photocopiers, air conditioners and diesel generating sets) and reconditioned/refurbished parts of capital goods without authorisation. For import of other used goods, you need an authorisation. 

Business Standard invites readers’ queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in
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Business Standard
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'Unused imported raw material may be sold by EOUs in DTA'

SME Chatroom | TNC Rajagopalan

I refer to your earlier Q&A stating that trading is not permitted for EOUs. Can an EOU make DTA sale of raw material imported/indigenously procured duty free, if they remain un-utilised due to any reason, such as reduction in export orders?

Yes. As per Para 6.15 (a) (ii) of the FTP, in case an EOU/EHTP/STP/BTP unit is unable to utilise goods and services, imported or procured from DTA, it may be disposed of in DTA with the approval of Customs authorities on payment of applicable duties and submission of import authorisation.

As per Para no. 4 of the notification 52/2003-Cus and Para no. 8 of 22/2003-CE both dated March 31, 2003, the said officer may, subject to such conditions and limitations as he may deem fit to impose under the circumstances of the case for the proper safeguard of revenue interest and also subject to such permission of the Development Commissioner or the Board of Approval or the Inter Ministerial Standing Committee as the case may be, wherever it is specially required under the Foreign Trade Policy, allow the unit to clear any of the said goods for being taken outside the unit, to any other place in India or to de-bond in accordance with the Foreign Trade Policy.   

We are education consultants based in India. We send students for higher study abroad. We get commissions in foreign exchange from foreign universities. Do we come under service tax?

The service you provide is that of an intermediary, in the sense that you act as an agent for the foreign university and get commission for selling their services. That service is not in the negative list and not covered under any exemption notification. As per Rule 9 (c) of Place of Provision of Service Rules, 2012, the place of provision of intermediary service is the location of the service provider. So, the service is taxable. 

We have made several exports in discharge of our export obligation against advance authorisation. We have not got any payment against one shipment and only part payment against another. Even so, we meet the 15 per cent value addition stipulation. In such a situation, can we include these shipments in our statement seeking discharge of export obligation?

As per the Reserve Bank of India’s directives, an exporter who has not been able to realise the outstanding export dues despite best efforts can seek write off of the unrealised portion subject to the fulfilment of stipulations regarding surrender of proportionate incentives. So, logically, you should not count the quantity of exports proportionate to the unrealised part of export dues, unless the case is covered under Para 2.85 or Para 2.87 of the Handbook of Procedures, Vol.1.

Can we import used car parts without a licence?

No. Para 2.31 of the FTP allows import of second-hand capital goods (except computers, photocopiers, air conditioners and diesel generating sets) and reconditioned/refurbished parts of capital goods without authorisation. For import of other used goods, you need an authorisation. 

Business Standard invites readers’ queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in

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Business Standard
177 22