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Supply to SEZ

Jigish (EM) (42 Points)

02 April 2010

An end user in SEZ area has placed order on an India Company in Indian Rupee. The Indian company is importing the material but not doing any value addition. In that case can the company bring the material from customs without paying customs duty, CVD and additional duty to their customs bonded godown and supply to the customer in SEZ in India and raise the invoice in Indian rupee?

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3 Replies

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 02 April 2010

as per PARA 6.14 OF HAND BOOK OF POLICY PROCEDURES VOL-1(2009-2014)

"SUPPLY TO OTHER EOU/EHTP/STP/BTP/SEZ UNIT SHALL BE COUNTED TOWARDS NFE PROVIDED THAT SUCH GOODS ARE PERMISSABLE FOR PROCEREMENT BY THESE UNITS"

NET FOREIGN EXCHANGE , REFERS TO :-

A-B/B

A , WHERE EXPORTS, (IS THE TOTAL OF FOB VALUE)

B , WHERE IMPORTS (IS THE TOTAL OF CIF VALUE)

INVOICE MADE BE ALSO PERMITTED BY RBI IN INDIA RUPEE.

THX

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Jigish (EM) (42 Points)
Replied 02 April 2010

Thank you for prompt reply.

The query is because the supplier is not manufacturer. They are trader. The purpose is to be competitive. If customs duty, CVD etc. are included in cost, the company can not be competitive.

How the material movement could be? Can material be brought to customs bonded godown without paying customs duty, CVD and additional duty and then be despatched to SEZ unit without charging CVD, additional duty and sales tax?

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 03 April 2010

JIGESH JI,

AS PER FOREIGN TRADE POLICY 2009-2014 , PARA 6.13

"TRANSFRED OF MANUFACTURED GOODS SHALL ALSO BE ALLOWED FROM EOU/EHTP/STP/ BTP/ UNIT TO A SEZ DEVELOPER OR UNIT FOLLOWING PROCEDURE PRESCRIBED IN SEZ RULES , 2006"

ANY DUTY AND VAT WILL NOT BE APPLICABLE FOR SEZ. UNIT.