Customs can allow re-export

CHATROOM

If the importer abandons the title to goods imported, the foreign exporter continues to be the owner of the goods.

We have obtained an advance license on ad-hoc norms basis but the norms have not been finalised. It has been more than an year, since we obtained the licence. In the meantime, we have fulfilled the export obligation. We have approached the authorities for grant of export obligation discharge certificate but we are informed that unless the norms are finalised, the certificate cannot be granted. The Foreign Trade Policy says that norms will be deemed to be final after four months. But the authorities are not willing to accept that. Can you please enlighten us?

This is a flaw in the policy that the Director General of Foreign Trade should look into. When the policy says that the norms will be deemed to be final as applied after a certain lapse of time, there should be a clear provision that export obligation discharge must be accepted by the Regional Authority, if necessary after verifying the fact regarding the fate of the norms fixation from the DGFT's office by e-mail.

We have a letter of credit where trans-shipment is prohibited but the bill of lading says that the goods will be transshipped at Singapore. The shipping agents say that few direct sailing vessels are available for Nhava Sheva to Houston. It is too late to approach party for LC amendment. Is there a way out?

In respect of shipments by containers, lash barges or trailers, bills of lading stating that the trans-shipment will take place is acceptable even if the letter of credit prohibits trans-shipment. Please see Article 20 (c) (ii) of Uniform Customs and Practices for Documentary Credits, 2007 Revision, ICC Publication No. 600. If your shipment is not by container, trailer or lash barges, the bill of lading would be considered a discrepant document.

Our foreign supplier, by mistake, has sent some goods that are different from what we ordered. He has agreed to take them back. Can we send them back without clearing from the customs?

If you have not filed the bill of entry and as on behalf of the foreign supplier, to send back the goods, the customs can allow that. In the case of Pacific International Traders [2002 (142) ELT 544 (Bom)], the Bombay High Court had held that if the importer had abandoned the title to goods imported and has also not presented the bill of entry, the foreign exporter continues to be the owner of the goods and is entitled to ask for re-export of the goods.

We have deposited service tax on the amount of payment that we have received from the client after Tax Deduction at Source (TDS). Our authorities say that this is not correct. Do we need to pay service tax on the amount of TDS deducted?

The value of service you have rendered is the gross amount paid by the client and not the net amount after TDS deduction. Service Tax is payable on the gross amount.

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