We are an EOU. We have an order to supply our finished goods to a SEZ unit. Rule 36(14) of SEZ Rules, 2006 says that we must follow the procedures prescribed in Rule 36(12) of the said Rules that apply to clearance from bonded warehouses to SEZ. Rule 36(12) requires us to clear the goods under an ex-bond shipping bill duly passed by the bond officer. When we are not under bonding procedure, how can we comply with the same?
EOUs were de-licensed as bonded warehouses with effect from August 13, 2016, through notification 44/2016-Cus dated July 29, 2016. CBEC Circular no. 35/2016-Cus dated July 29, 2016, explains the changes consequent to issue of that notification. It appears the Commerce Ministry is unaware of the changes. So, you may draw its attention to the changes and ask for amendment in the Rule 30(14) of the SEZ Rules, 2006.
Freight consolidators act as agents of foreign airlines and shipping companies. They accept freight and other charges from exporters for shipments made through them. What are the FEMA or other guidelines for remittance of freight and other charges by them to their principals, as per their agreements?
These are current account remittances, and based on suitable documentation, the banks can remit the payments. In this connection, please refer to Para 7(v) of Annexure 1 to A.D. (M.A. Series) Circular no. 11 dated May 16, 2000, issued by the Exchange Control Department of the RBI.
We design and develop samples for buyers abroad. We send them to the buyers as free trade samples. But, we do invoice them for design and development charges. Can we treat the transaction as export of services and zero-rate the transactions under the GST laws?
The essential nature of the transaction is service, and the trade sample only represents the results of your design and development service. Under GST laws, it will qualify as export of service, if you fulfill all the conditions prescribed at Section 2(6) of the IGST Act, 2017. You can zero-rate the services in accordance with Section 16 of the IGST Act, 2017.
We have running export packing credit (EPC) facilities with our bank. At present there are no overdues in the EPC account, as we get all our export bills discounted and get the proceeds credited to the EPC. In the post-shipment credit facility, some bills are overdue. Now, for some shipments we have not availed of EPC and we want the export proceeds to be credited to our current account. Can the bank agree to this, or will it adjust the funds after discounting these bills against overdue export bills?
It depends on the documents you executed with the bank for the credit facilities. If the documents give the rights to your bankers to appropriate your funds towards the overdue bills, then you cannot object to their exercising their rights.
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