Customs duty -adhoc exemption - instructions
AS per Section 25(2) of the Customs Act, if the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable.
Thus, each case has to be examined on merit, keeping in mind, the aspect of "public interest", "the exceptional nature of the circumstances" warranting duty exemption, and the general policy adopted in the past.
Board had in Circular no. 49/2003 -Customs dated 10th June, 2003 issued guidelines for granting exemption under the section.
As per the guidelines,
++ Payment of Customs duty cannot be viewed as a dispensable expenditure, and there should be no need to seek adhoc exemption from payment of Customs duty on goods meant for the normal functional requirements of the Central Police Organizations, State Police Organizations, and Para-military forces.
++ Similarly adhoc exemption from Customs duty will not be considered for import of goods made by Central/State Governments, autonomous bodies, Municipalities, and public sector undertakings as part of the schemes or projects implemented by them.
But these instructions are not kept in mind while requesting for adhoc exemption. Board gets a number of requests from Ministries, State Governments, Autonomous Bodies, Municipalities and Public Sector Undertakings for customs duty exemption on various items meant for normal functional requirement or for various projects implemented by them, even without specifying as to why they could not provide budgetary allocation for payment of Customs duty.
So Board had in Circular no. 10/2007 -Customs dated 13th February, 2007 directed that such requests for exemption in such cases should not be forwarded and to make necessary budgetary provisions for payment of Customs duty along with the cost of the imported goods.
Now, after seven years, CBEC has issued fresh instructions as per which:
1. Imports made by Central/State Governments, Municipalities, public sector undertakings and autonomous bodies will not be considered for adhoc exemption. All such agencies are expected to make budgetary provisions for payment of customs duty along with the cost of the imported goods. However, an exception could be considered in cases where such agencies are recipients of imported goods as grants from foreign Governments/foreign organizations.
2. Exemptions could also be considered in respect of cases recommended by the Secretary, Ministry of External Affairs for reasons of furthering India's foreign relations. While recommending any such case, Ministry of External Affairs shall state why the exemption is in national interest.
3. Cases of re-import of artefacts and memorabilia representing India's historical, cultural and art heritage intended for public exhibition, could also be considered for exemption, subject to recommendation for duty exemption by the Secretary, Ministry of Culture, Government of India.
4. Cases of import required for treatment of individuals, who are suffering from life threatening diseases, could be considered on case-to-case basis. Such cases will be examined from the point of view of the nature of the medical condition and financial circumstances of the applicant.
5. Import of goods meant for relief and rehabilitation of people affected by natural disasters and epidemics could be considered for exemption subject to fulfilling certain conditions:
6. Import of medical or surgical instruments and apparatus by charitable hospitals could be considered for exemption of duty subject to certain conditions:
MONITORING OF ADHOC EXEMPTION ORDERS (AEO)
An undertaking to comply with the conditions mentioned in the AEO shall be given by the applicant before the Commissioner of Customs at the port of import for claiming benefit of exemption under the order at the time of clearance. The said Commissioner of Customs shall send copies of documents pertaining to the import, such as the Bills of Entry, Invoices, etc. along with a copy of the said undertaking to the Commissioner of Central Excise having jurisdiction over the site of utilization of the goods or the location of the applicant, as specified in the AEO, within fifteen days of the clearance of the items exempted by the order.
The applicant shall intimate the said jurisdictional Commissioner of Central Excise, as soon as possible, and not later than seven days from the date of Customs clearance of the goods, of the site of utilization of the exempted items, and also furnish any other information that the said Commissioner may require for verifying the compliance of the conditions of the order. The Commissioner of Central Excise shall, within three months of the clearance of the items exempted by the order, verify the compliance with the conditions of the order and send a report to the Commissioner of Customs of the port of import. The verification report shall be sent so as to reach the Commissioner of Customs not later than six months of the issuance of the order.
CBEC Circular No. 9/2014 -Cus., Dated: August 19, 2014