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'Deemed export benefits available to sub-contractor named in contract''

If your name is mentioned in main contract and you get a PAC to that effect, you can get benefits

TNC Rajagopalan 

'Deemed export benefits available to sub-contractor named in contract'

We are a service provider. In the Budget a new levy called Krishi Kalyan Cess has been levied. Are we required to charge this cess on all the bills that we raise from March 1, 2016?

No. The provisions relating to that cess are to come into effect from June 1, 2016, if the Finance Bill 2016 is passed by then, with Chapter VI of the said Bill intact.

A foreign company has bagged a contract for execution of a project, supplies to which are covered under the eligible categories of deemed exports under Para 8.2 of the Foreign Trade Policy. In turn, that foreign company has placed an order on us for manufacture and supply of certain goods required for the project. Can we get the benefit of deemed exports?

Apparently, the foreign company is the main contractor and you are a sub-contractor manufacturing some of the items required for execution of the project. Deemed export benefits are available to a sub-contractor whose name is mentioned in the main contract. So, if your name is mentioned in the main contract and you get a Project Authority Certificate to that effect, you can get the benefits, provided you satisfy the other conditions for getting the benefits of deemed exports.

We had exported some goods and obtained drawback. We re-imported the goods without duty payment for repairs and re-export under notification no. 158/95-Cus dated November 14, 1995 by furnishing a bond, but we are unable to re-export the goods. Are we required to surrender the drawback with interest?

On failure to re-export the goods, you have to forego the benefit of the exemption that you availed. Under the said notification 158/95 and the bond furnished, you are required to pay full duty as though the goods are re-imported under Section 20 of the Customs Act, 1962 along with interest.

We refer to the Circular No. 187/6/2015-ST dated November 10, 2015, which lays down a scheme for speedy dispersal of pending refund claims of exporters of services under Rule 5 of the Cenvat Credit Rules, 2004. Is this scheme restricted to any categories of exporters?

No. This scheme is applicable to all service tax registrants who are exporters of services, with respect to refund claims under Rule 5 of the Cenvat Credit Rules, 2004 which have been filed on or before March 31, 2015 and which have not been disposed of as on the date of issue of that circular.

Para 4.56 of the Handbook of Procedures, Vol. 1 has a provision for re-export of goods imported under the Duty Free Import Authorisation Scheme. I don’t find a similar provision under the advance authorisation scheme. Is there any way we can re-export goods imported under advance authorisation and found defective or unfit for use? If so, what care we should take?

Yes. You may re-export in accordance with Para 2 of the notification 18/2015-Cus dated April 1, 2015. Please do take note of the time limits and identification requirement mentioned therein.

First Published: Mon, March 07 2016. 17:20 IST