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EOU Unit - DTA purchase from Importer - Credit of Duty Paid

Sree (FM) (26 Points)

28 May 2010

Hi All

We are an 100% EOU. We purchase some raw materials from a trader in India who has imported these materials paying applicable customs duties.

In this connection, clarification is saught:

a) Can the trader take credit of customs duty paid by him (since he has made sale to 100% EOU)?
b) Can the 100% EOU take such credit in case the trader is not availing the same.

Please clarify the provisions and procedures.

Thanks

Sreejith

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9 Replies

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 28 May 2010

Sree,

a) Can the trader take credit of customs duty paid by him (since he has made sale to 100% EOU)?

b) Can the 100% EOU take such credit in case the trader is not availing the same.

Please clarify the provisions and procedures.

Reply:-

a) YES, AS A DRAWBACK,

b) Reimbursement of CST,EXEMPTION FROM PAYMENT OF CENTRAL EXCISE DUTY ON GOODS PROCURED FROM DTA ON GOODS MANUFACTURED IN INDIA.

FOR MORE INFORMATION PATH IS:- nsez.gov.in

:- chapter 6 of foreign trade policy 2009-2014

Regards,

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Sree (FM) (26 Points)
Replied 28 May 2010

Dear Ramesh

Thanks for the input.

However, for option (b), please note that the goods are not manufactured in India. It is imported by a trader in India. In case the trader is not availing the benefit of duty drawback, can the EOU unit avail the same?

Best Wishes

Sreejith

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 28 May 2010

Sree,

(b), please note that the goods are not manufactured in India. It is imported by a trader in India. In case the trader is not availing the benefit of duty drawback, can the EOU unit avail the same?

Sreejith

IN CONTINUATION OF THIS MATTER, PLEASE SEE THE PARA 6.11 (A) OF FOREIGN TRADE POLICY 2009-2014"SUPPLIES FROM DTA TO EOU/ EHTP/ STP/BTP UNITS WILL BE REGARDED AS "DEEMED EXPORTS" AND DTA SUPPLIES SHALL BE ELGIBLE FOR RELEVANT ENTITLEMENTS UNDER CHAPTER 8 OF FOREIGN TRADE POLICY, BESIDES DISCHARGE OF EXPORT OBLIGATION , IF ANY ON THE SUPPLIER. NOTWITHSTANDING THE ABOVE , EOU / EHTP/ STP/ BTP UNITS SHALL ON PRODUCTION OF A SUITABLE DISCLAIMER FROM DTA SUPPLIER, BE ELGIBLE FOR OBTAINING ENTITLEMENTS SPECEFIED IN THE CHAPTER 8 OF FTP, FOR CLAIMING DEEMED EXPORTS DUTY DRAWBACK , THEY SHALL GET BRAND RATES FIXED BY DC WHEREVER ALL INDUSTRY RATES OF DRAWBACK ARE NOT AVAILABLE.

REGARDS,

Sree (FM) (26 Points)
Replied 28 May 2010

Thanks Ramesh

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 28 May 2010

SREE,

WELCOME YOU,

REGARDS

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Snehal (Asst Manager Import-Export) (22 Points)
Replied 19 August 2010

If, the material is cleared on payment of duty in EOU Unit , can EOU Unit sale the material locally ?

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 19 August 2010

MR. SNEHAL,

CAN SALE BUT, PRE-CONSENT OF DEVELOPMENT AUTHORITY IS MANDATORY, IF THE DEVELOPMENT COMMISSIONER PERMIT THE 100%EOU UNIT SALES THE GOODS IN DOMESTIC MARKET BEFORE FILED A BOND/ LUT.

REGARDS