Good returned from sez

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2013 Dear Expert,

We are in receipt of goods returned from SEZ unit while charging Custom Duty & CST, against our removal of goods to above SEZ without payment of duty against ARE-1, please confirm is the transaction is as per rule ?, since custom duty charged in their invoice is our expense.

Arun Kumar Singh

Arun Kumar Singh (Expert)
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29 August 2013 As per rule 19 of central excise rules 2002 you will intimate to the excise department if goods are return to factory for any reason goods have not been exported.

Querist : Anonymous

Querist : Anonymous (Querist)

30 August 2013 Dear Expert,

What about custom duty charged in customers invoice ?

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Querist : Anonymous

Querist : Anonymous (Querist)

30 August 2013 Dear Expert,

What about custom duty charged in customers invoice ?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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10 September 2013 AGREED WITH EXPERT JI,

more information :
https://www.caclubindia.com/experts/sez-goods-return-from-sez-sites-758630.asp#.Ui73PX9Hhkg

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2013 Sir, how we refund claim of custom duty ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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26 July 2024 Handling goods returned from a Special Economic Zone (SEZ) unit involves specific customs and tax procedures. Here’s how to manage the situation and claim a refund for the customs duty:

### **1. Understanding the Transaction**

When goods are returned from an SEZ unit, the following points are typically considered:

1. **Goods Returned from SEZ**:
- Goods returned from an SEZ unit are generally not subject to customs duty, provided they are returned under the same conditions as they were dispatched (e.g., not subjected to any value addition or alteration).

2. **Original Removal from SEZ**:
- When goods are removed from an SEZ unit to the domestic area, they are usually moved under an ARE-1 form without payment of duty, as SEZ units are duty-free zones.

3. **Customs Duty on Returned Goods**:
- If the returned goods are subjected to customs duty, it may be considered an error if the goods are indeed returned in their original state.

### **2. Procedures to Follow**

**a. Check Compliance with Regulations**

1. **Verify Regulations**:
- Confirm the specific regulations and procedures with your local customs authorities or refer to the Customs Act, 1962, and the SEZ Rules, 2006, to ensure compliance.

2. **Document Review**:
- Ensure that all documents related to the original removal, including ARE-1 and other relevant paperwork, are in order.

**b. Claim Refund of Customs Duty**

1. **File a Refund Claim**:
- If you have been charged customs duty on returned goods that should not have been subject to such charges, you can file a refund claim with the customs authorities.

2. **Prepare Documentation**:
- **Refund Application**: Prepare and submit a refund application to the customs authorities. This should include a detailed statement of the claim and the reasons for the refund.
- **Supporting Documents**: Include documents such as:
- Original ARE-1 form (or proof of duty-free removal from SEZ).
- Invoice showing customs duty charged.
- Proof of return of goods from SEZ.
- Any correspondence or documentation proving that the goods were returned in the same condition they were dispatched.

3. **Refund Process**:
- **Submit to Customs**: Submit the refund application and documents to the appropriate customs office.
- **Follow Up**: Follow up on the application to ensure it is processed in a timely manner.

**c. Consult with Experts**

1. **Customs Consultant**:
- Consider consulting with a customs consultant or legal advisor to ensure that all procedures are correctly followed and to expedite the refund process.

2. **Tax Advisor**:
- For issues related to CST (Central Sales Tax) or VAT, consult with a tax advisor to handle the refund or adjustments related to state taxes.

### **3. Handling Expenses and Accounting**

1. **Accounting for Duty Charged**:
- Record the customs duty charged as an expense if it was billed to you, but make sure to adjust your accounts once the refund is processed.

2. **Adjusting CST/VAT**:
- If CST or VAT was applied incorrectly, adjust your tax records and consult with your tax advisor to correct your tax filings and claim any appropriate refunds.

### **Summary**

To ensure that your transaction is compliant with rules and to claim a refund for customs duty, follow these steps:

1. Verify that the returned goods should not have been subject to customs duty based on SEZ rules.
2. File a refund claim with the customs authorities, providing all necessary documentation.
3. Consult with customs and tax experts to ensure accurate and timely resolution.

Properly handling these procedures will help ensure compliance and facilitate the recovery of any undue charges.