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Procurment of Goods from an SEZ for export purposes

27 January 2009

Can a merchant Export Company use form CT-1 to save Excise & Customs Duty when the goods for export is to be sourced from an SEZ.

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3 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 28 January 2009

Yes. Supply to SEZ is trated as Physical export. Procedure for such export has been given in Rule 29/30 of the SEZ Rules.

Further, as per 6(6) of the Cenvat Credit Rules, cenvat credit on ibputs etc. is not required to be reveresed for supply to SEZ unit or SEZ developer.

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Manish Gupta (CA) (30 Points)
Replied 28 January 2009

Dear Rajesh

My concern is other way round, I wish to buy from a company in SEZ for export purposes.

So the goods will come from SEZ to DTA & then will be exported outside india without any changes.

Now since goods are not for home consumption, there must be some way to bypass custom duty either by the way of bond or form CT-1.

Your help & guidance will be appreciated.

Regards,

Manish Gupta

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 01 February 2009

Actually, when goods will come from SEZ to DTA, import duty is payable. At the time of export certaily you can take 97% of the custom duty paid as drawback under Section 75 of the Custom Act. I cant find any other way to take exemtion from custom duty.

If possible, look for direct export from the SEZ unit, where the unit will export goods, which you can buy on high seas and sell to your buyer.