Custom Duty on Repaired Imported Goods

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sambhav Jain (Querist)
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28 September 2022 Dear Sir,
I Just want to know that, is custom duty will be levied on Repaired imported goods. My Imported goods received on 2 months back and during site inspection we found that damage in goods. supplier is agree for free replacement. Goods are imported under EPCG scheme.
Supplier is sending the repaired goods along with pending one consignment. for this case if supplier make a replaced items parts of accessories and include in packing list and invoicing value will be value of pending consignment. is this procedure ok ? or , if supplier send repaired parts separtely then who we can avoid the custom duty? please guide me.

Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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06 July 2024 When dealing with repaired or replaced imported goods under the EPCG scheme, there are specific considerations regarding customs duty:

1. **Repaired Goods Under EPCG Scheme**: If imported goods under the EPCG (Export Promotion Capital Goods) scheme are found damaged or defective and are repaired or replaced by the supplier, customs duty implications can vary based on the nature of the repair or replacement.

2. **Customs Duty on Repaired Goods**: Generally, repaired goods that are re-imported after repair or replacement may attract customs duty. The duty may be levied based on the value of the repair or replacement, unless specific exemptions or procedures apply.

3. **Procedure for Replaced Parts**:
- **Including in Pending Consignment**: If the supplier includes repaired or replaced parts as accessories in the pending consignment and values them as part of the overall consignment, customs duty may be applicable on the entire consignment based on its assessed value.
- **Separate Shipment of Repaired Parts**: To potentially avoid customs duty on repaired parts, the supplier may send them separately with documentation clearly stating that these are replaced or repaired parts. The customs authorities would need to be informed and may inspect to verify the nature of the shipment.

4. **Documentation and Procedures**:
- It's crucial to maintain proper documentation, including a detailed packing list and invoices clearly stating the nature of the goods (repaired/replaced parts) and their value.
- Communication with customs authorities is essential to ensure compliance with regulations and to potentially seek any duty exemptions or reductions that may apply.

5. **Consultation with Customs Authorities**: Given the specific circumstances of imported goods under the EPCG scheme and their subsequent repair or replacement, consulting with customs authorities or a customs broker experienced in such matters can provide precise guidance tailored to your situation.

In summary, while repaired goods under the EPCG scheme may attract customs duty, proper documentation and adherence to customs procedures can help manage and potentially mitigate these duties, especially if repaired or replaced parts are handled separately and appropriately declared.