The Central Board of Excise and Customs (CBEC) has prescribed a common bond for advance authorisation and EPCG (Export Promotion Capital Goods) schemes, thus fulfilling a long-standing demand of exporters and implementing a key recommendation of the commerce ministry’s Task Force to Reduce Transaction Costs in Exports. The exporters have the option not to furnish the common bond and continue to furnish bond for each shipment.
The authorisation holders who furnish the common bond must import or export all goods from customs station where ICES 1.5 software is fully implemented and the customs location is notified under Para 4.19 of the Handbook of Procedures, Volume 1.
Every financial year, at the time of registration of the first authorisation, the exporter opting for the common bond must estimate the amount of duty that he is likely to save under various authorisations and furnish the bond at the port of registration of the first authorisation issued/to be issued in that financial year for import of goods from a specified port. The common bond shall be applicable for all authorisations issued in that financial year for imports from specified ports. The bond account will be debited for the duty saved amount every time duty-free or concessional duty imports are allowed and credited when the discharge of export obligation is admitted by the Customs.
For each Importer Exporter Code number, one common bond will be accepted. This means that the exporters who have a number of manufacturing units and obtain authorisations at various offices must estimate the bond amount carefully and, in case, the bond amount falls short, arrange to enhance the bond amount suitably.
Status holders and certain categories of exporters mentioned in the CBEC Circular number 58/2004-Cus dated 21.10.2004 need not furnish bank guarantees. A very considerate and sensible aspect of the instructions regarding common bond is that those who are required to furnish bank guarantees need not cover the duty saved based on the full value of the common bond but may cover only the duty saved on the imports they actually effect.
Besides the well crafted circular (number 11A/2011 dated 25.02.2011) regarding common bond, CBEC has issued another useful circular (number 12/2011 dated 1.3.2011) allowing importers under the Project Import Regulations to furnish bank guarantees instead of insisting on cash deposit. Another helpful circular (number 11/2011 dated 24.02.2011) extends the time limit for using re-credited DEPB /Reward Scheme scrips in case of 4 per cent CVD refund up to June 30, 2011.
CBEC has also instructed (circular number 13/2011 dated 28.02.2011) that all consignments of export packed with wood packaging materials should be allowed clearance only if the wood packaging materials conform to requirements of International Standards for Phytosanitary Measures (ISPM-15) and that exporters should specifically indicate in the Shipping Bill filed for export, the description of packaging material so as to ensure whether any consignment with wooden packaging material warrants mandatory compliance with ISPM-15 standards or not. Drawback on re-export of goods imported from third countries to Nepal has been disallowed (notification number 13/2011 dated 24.02.2011) and a detailed clarification (circular number 15/2011 dated 18.03.2011) on applicability of indirect taxes on packaged software has also been issued. Besides, Food Safety and Standards Authority will test food articles imported from Japan for radioactive contamination before clearance (CBEC instruction dated 17.03.2011)
