The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification removing pre-import conditions and included specified deemed export supplies for exemption from integrated tax and Compensation cess for materials imported against Advance Authorization and Advance Authorizations for Annual Requirement.
As per the Notification issued in 2015, Advance Authorization and/or materials imported thereunder will be with actual user condition. It will not be transferable even after completion of export obligation. However, Authorization holder will have the option to dispose of product manufactured out of duty-free inputs once export obligation is completed.
In case where CENVAT credit facility on inputs have been availed for the exported goods, even after completion of export obligation, the goods imported against Advance Authorization shall be utilized only in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer), for which the authorization holder shall produce a certificate from either the jurisdictional Central Excise Superintendent or Chartered Accountant, at the option of the exporter, at the time of filing application for EODC to RA concerned.
The notification issued by the Board last day said that the Certificate of Chartered Accountant is mandatory even if the credit is not availed after completion of export obligation, the goods imported against Advance Authorization.
The present Notification inserted a new provision in (vi)(a) of the earlier notification that “in respect of imports made after the discharge of export obligation in full, if facility of input tax credit under relevant Goods and Services Tax law on inputs used for manufacture and supply of goods exported has been availed, then the importer shall, at the time of clearance of the imported materials, furnish a bond to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself, to use the imported materials in his factory or in the factory of his supporting manufacturer for the manufacture and supply of taxable goods (other than nil rated or fully exempt supplies) and to submit a certificate from a chartered accountant within six months from the date of clearance of the said materials, that the imported materials have been so used.”
This is subject to a condition that if the importer pays integrated tax and the goods and services tax compensation cess leviable on the imported materials under sub-section (7) and sub-section (9) respectively of section 3 of the said Customs Tariff Act on the imported materials but for the exemption contained herein, then such imported materials may be cleared without furnishing a bond specified in this condition.