New anomalies in CBEC rules

The Central Board of Excise and Customs (CBEC) has issued a useful circular (no.29/2017-Cus, dated July 17), removing some operational difficulties of Export Oriented Units (EOUs). It should now resolve some more export issues.

CBEC says till this month-end, EOUs may use their procurement certificate for import of goods or follow the procedure at Rule (5) of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. The B-17 bond, being a general purpose running one, will serve the requirement of a continuity bond under these rules; no separate continuity bond need be given. An EOU may present the information about estimated quantity and value of goods to be imported for any period less than a year and then give the requirement for subsequent periods. And, amend/modify or add such information from time to time as necessary for import.

For transfer of goods from one EOU to another, procurement certificates would not be required. Such transfers must be made under cover of invoice on payment of the applicable Goods and Services Tax (GST) but without payment of customs duty. The supplier unit must endorse on the invoice the amount of customs duty availed as exemption, if any, on these goods. The receiving unit must pay this duty if the same goods or finished goods made from these are cleared in the Domestic Tariff Area (DTA).

CBEC has in its Circular26/2017-Cus dated July 1 laid down the new procedure to be followed for self-sealing of export containers from September 1. It says the exporter must seal the container with a tamper-proof electronic seal of standard specification, not a bottle seal. The e-seal should have a unique number, to be declared in the shipping bill. Before sealing the container, the exporter must feed data such as name, Importer Exporter Code, GST identification number, description of the goods, tax invoice number, name of the authorised signatory (for affixing the e-seal) and shipping bill number in the e-seal.

Then, the container must be sealed with the same e-seal before leaving the premises, says CBEC. Now, most exporters do not know what is meant by e-seal. Also, how can a shipping bill number be known before self-sealing of containers at the factory? CBEC should clarify.

Under Rule 30(2) of the Special Economic Zones (SEZ) Rules, 2006, many local suppliers could send to SEZ developers/units, goods without excise duty payment or under rebate claim under cover of the ARE-1 form. If they did not want to claim any export incentives, they were not required to file the bill of export. They also could claim sales tax exemption against Form-I. In the new GST regime, the ARE-1 form and Form-I are dispensed with for items covered under GST but the said Rule 30(2) remains unamended. Now, any zero-rated supplies to an SEZ of such goods may be made under cover of only the GST invoice. If these invoice details are not linked to the bill of export, the suppliers might be saddled with a tax liability. However, the Customs EDI system at an SEZ does not let them or the SEZ unit/developer file a bill of export unless export incentives are claimed.

CBEC should look for such operational difficulties and give solutions.  

E-mail: tncrajagopalan@gmail.com