Exemption for EOUs, STP - Amendments
PERHAPS as a part of aligning with the Foreign Trade Policy and ease of doing business, the Government has amended two notifications.
Notification No. 22/2003-Central Excise, dated the 31st March, 2003 : Exemption to goods brought into EOUs/STPs/EHTPs;
Utilisation of duty free goods : As per Condition 4 clause (a), sub-clauses (i) and (ii) of the Notification, the user industry has to undertake to pay the duty with interest;
i. in case of capital goods, if such goods are not proved to be used within the user industry within a period of one year from the date of procurement or extended period up to a maximum of five years;
ii. in case of other goods, are not used within three years or the extended period as may be allowed.
Now, this is amended to allow the use within the period of validity of the Letter of Permission (LoP).
Destruction of goods : As per para 3 of the notification, duty need not be paid if the capital goods or reject, waste or scrap material, if such goods are destroyed within the user industry in the presence of the central excise officer or outside the user industry, where it is not possible or permissible to destroy the same within the user industry.
Now they can be destroyed within the unit after intimation to Customs authorities or destroyed outside the unit with permission of Customs authorities.
LoP Defined : A new clause has been inserted in the notification to define LoP; "Letter of Permission (LoP)" has the same meaning as assigned in Chapter 6 of the Foreign Trade Policy 2015-20 notified by the Government of India in the Ministry of Commerce and Industry, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification No. 01/2015-2020, dated the 1st April, 2015.
The Provisions before and after the amendment are as:
Condition (4), sub-clauses (i) and (ii) | |
(i) in the case of capital goods, such goods are not proved to the satisfaction of the said officer to have been installed or otherwise used within the user industry within a period of one year from the date of procurement thereof or within such extended period not exceeding five years as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow ; | i) in the case of capital goods, such goods are not proved to the satisfaction of the said officer to have been installed or otherwise used within the user industry, within the period of validity of the Letter of Permission (LoP); |
(ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods in accordance with SION for export out of India or cleared for home consumption within a period of three years from the date of procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow: | ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods for export out of India or cleared for home consumption within the period of validity of the Letter of Permission ( LoP ) |
paragraph 3, clause (iii) | |
3. Subject to the satisfaction of the said officer, duty shall not be leviable in respect of - (iii) the capital goods or reject, waste or scrap material, if such goods are destroyed within the user industry in the presence of the central excise officer or outside the user industry, where it is not possible or permissible to destroy the same within the user industry: Provided that the remnants, remains or scrap after such destruction, if cleared into Domestic Tariff Area, applicable duty shall be levied on such goods: Explanation. - The consultancy fees received by software development units in convertible foreign currency for consultancy service for development of software 'on site' abroad shall be deemed to be export for the purposes of fulfillment of positive Net foreign exchange Earning under this notification. | 3. Subject to the satisfaction of the said officer, duty shall not be leviable in respect of - (iii) capital goods, raw material, consumables, spares, goods manufactured, processed or packaged, and scrap or waste or remnants or rejects are destroyed within the unit after intimation to Customs authorities or destroyed outside the unit with permission of Customs authorities: Provided that the remnants, remains or scrap after such destruction, if cleared into Domestic Tariff Area, applicable duty shall be levied on such goods: Provided further that this provision shall not apply to gold, silver, platinum, diamond, precious and semi precious stones."; |
Letter of Permission defined. | |
Notification No. , Dated: May 25, 2015
Notification No. 52/2003- Customs, dated the 31st March, 2003 : EXEMPTION to goods imported for EOUs/STPs/EHTPs: This is an almost identical notification as the Excise Notification No. 22/2003. And similar amendments are made in that notification also.
Notification No. , Dated: May 25, 2015