Clarification on import by EOUs

The Central Board of Indirect Taxes and Customs (CBIC) has issued a useful circular. It clarifies the procedure for import by export-oriented units (EOUs) and units of software technology parks, electronic hardware technology parks and bio-technology parks, collectively referred to as EOUs here. It can go further and clarify other related issues.  

EOUs import their requirement without payment of duty or taxes, under notification 52/2003-Customs dated March 31, 2003. Before introduction of the Goods and Services Tax, these were required to get procurement certificates from their jurisdictional excise/customs authorities and give this to the authorities at the customs station of import. This changed with introduction of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, with effect from July 1, and suitable amendments to the said notification 52/2003, requiring the EOUs to follow the procedure prescribed in the new Rules. 

Under the new procedure, EOUs are required to provide information in duplicate to the jurisdictional customs authorities regarding estimated quantity and value of goods to be imported. And, give one set of this information to the authorities at the custom station of importation. The Rules allow the benefit of exemption notification to the EOUs on the basis of this information. There is no requirement for the information to be approved by the jurisdictional authorities on a prior basis for import. However, a misconception did prevail that prior approval is necessary. So, the CBIC has clarified that the importer EOU need not get prior approval of the information submitted under the said Rules from the jurisdictional authorities for duty-free import at the custom station of importation. Information given to the authorities at the custom station of importation by an EOU is sufficient for importing goods without payment of duty under exemption notification 52/2003-Customs. 

EOUs, however, need to be careful. This system is based on trust, that they will take necessary care to ensure they import only the goods eligible under the said notification 52/2003. The government has removed only the process of prior-import verification and approval. The jurisdictional authorities will ensure the intimation received under the said Rules are properly scrutinised, so that only eligible goods as prescribed under notification 52/2003-Customs, as well as those eligible in line with the Letter of Permission (LOP) granted by the jurisdictional development commissioner, are imported duty-free by the EOUs. 

After prompt scrutiny, they are to send one copy of  this information to the authorities at the custom station of importation, who would reconcile this with the bill of entry against which goods were imported duty-free. If any discrepancies are noticed, the authorities at the custom station of importation would inform the jurisdictional authorities.

The CBIC circular is specific to EOUs importing through customs station of importation. However, the clarification should apply equally to import by other entities using the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, for claiming exemption under other notifications that mandate following the procedures under the said Rules. The circular should also apply equally to EOUs and others procuring goods from bonded warehouses and international exhibitions held in India. CBIC should clarify these points, too. 
 

E-mail: tncrajagopalan@gmail.com