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CBIC directs Action for Recovery of Inadmissible Duty Credit under Incentive and Reward Schemes [Read Circular]

Inadmissible Duty Credit - Taxscan

The Central Board of Indirect Taxes and Customs (CBIC) has directed action for recovery of inadmissible duty credit under incentive and reward schemes.

The Principal Commissioner of Customs has issued a circular regarding the recovery of export benefits given under Incentive and Reward Schemes under Chapter 3 of FTP on the re-import of exported goods.

On issue regarding recovery of export benefits given under incentive and reward schemes of Foreign Trade Policy (FTP) on re-import of exported goods has been highlighted by C&AG of India and observed that the Audit has inter-alia pointed out that there was no provision in the Customs notification to recover the duty credit given under reward and incentive schemes at the time of re-import of such goods on which such benefit has been availed at the time of export.

The issue was examined in consultation with the Directorate General of Foreign Trade (DGFT), which administers the reward schemes. DGFT has informed that RBI Master Direction on exports and imports issued Circular already has a provision regarding a refund of incentives taken from DGFT for such re-imports.

DGFT has also informed that as per Handbook of Procedures issued under FTP 2015-20, a procedure for obtaining a ‘no-incentive certificate’ from Regional Authority (RA) of DGFT has been prescribed for such cases of re-import.

Wherefore, incumbent upon the importer to provide a no incentive certificate from Regional Authority(RA) of DGFT at the time of re-import of exported goods. Accordingly, it is reiterated that in cases of re-import of exported goods, a ‘no-incentive certificate’ from the respective Regional Authority(RA) of DGFT shall be submitted by the importer.

The Central Board of Indirect Taxes and Customs (CBIC) has said that the past cases of re-import of exported goods should be reviewed. Action for recovery of inadmissible duty credit, if any, in coordination with DGFT authorities shall be initiated.

To Read the full text of the Circular CLICK HERE
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