Customs can ask for purchase invoices from exporters claiming DBK, Rodtep

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As traders, we buy goods from the domestic market and export, claiming duty drawback at All Industry Rates and Rodtep benefits. Are the Customs justified in asking for our purchase invoices?
 

Yes. Rule 9 of the Customs and Central Excise Duties Drawback Rules, 2017 and proviso at Para 2(1)(b) of notification no.76/2001-Cus (NT) dated 23rd September 2021 put a cap on the amount of drawback and Rodtep credit that can be granted, based on the market price of the goods.

I refer to Sections 25A and 25B of the Customs Act, 1962 that deal with inward processing of goods and outward processing of goods. Can we opt for the dispensations given here for importing or exporting goods for job-work?
 

No. These Sections, introduced through the Finance Act, 2018, require the government to issue exemption notifications. Almost six years have passed; still, the government has not issued any notification under these Sections. So, they remain inoperative.
 

I am not satisfied with your reply that in respect of exports of SCOMET items under GAEC the government wants to ensure that the exporter has enough confidence in the buyer/end user to take responsibility for their actions. (SME Chatroom January 9, 2024). My point is that even if we do all the due diligence and even incorporate a clause in the purchase order that the items exported shall not be used for any purpose other than the purpose(s) stated in the EUC (End User Certificate) and that such use shall not be changed nor the items modified or replicated without the prior consent of the Government of India., it is not possible for us to ensure that the buyer/end user will always comply with that condition. We have no control once the goods leave our hands. So, please advise us how we can proceed?
 

As the Para 10.16 A.II.b.ii of HBP reads today, the applicant exporter is required to declare that the items that are intended to be exported shall not be used for any purpose other than the purpose(s) stated in the EUC (End User Certificate) and that such use shall not be changed nor the items modified or replicated without the prior consent of the Government of India. I agree that this provision is unreasonable but so long as the provision exists, the government is likely to insist that you comply with that requirement. I think you should represent to the DGFT your difficulty in giving such a declaration and pursue the matter till that provision is changed.
 

Section 65A was inserted in the Customs Act, 1962 through the Finance Act, 2023 providing for levy of Integrated GST and Compensation Cess on goods imported for manufacturing in bonded warehouses. This Section was to take effect from a date to be notified by the government. Has this Section come into effect and if so, since when?
 

No. The government has not yet notified the date when the provisions of this Section will come into effect.