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Used assests such as laptops & mobiles sale to holding company outside india

15 February 2016

A subsidiary company which has service tax registration but didn't claim any input on assets. It wants to be remit back the used Laptops and mobile phones to its holding company either by way of sale or any other manner. Please let me the procedure to sale these laptops to its parent foreign parent company. Should it needs to apply for import & export code ? if yes, How much custom duty will be paid ? Please share the complete procedure & details.

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3 Replies

Ajit Hegde (CA - Final) (1367 Points)
Replied 16 February 2016

The question of remit back arises only when you have obtained it from the holding company. In that case you must have paid custom duty and should have obtained IEC. If it was a purchase from any other company, now if you have to give it to holding company, it will be a export sales and IEC becomes mandatory for such sale. And since it is a capital asset, you may have to pay capital gain also

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DINESH VASHISHT (Manager) (72 Points)
Replied 17 February 2016

Thanks Ajit!

It was purchased from indian vendor and Goods are capital assests for company and now wants to sale to Holding company. Still is it export sale ??? if yes, what is the valuation rules for calculation of custom duty on it ??? can we sale it on below WDV ???

Could you share the relevant Law also along with the Rules and notifications for obtaining the IEC where it is mandatory to obtained IEC.

Thanks again for your support.

Ajit Hegde (CA - Final) (1367 Points)
Replied 22 February 2016

Export is a zero duty sale. Custom duty wont attract your sale. If the sale price is too low compared to wdv and market price customs may object. It is mandatory to have IEC for all exports and imports. Refer foreign trade policy and procedures issued by DGFT