CBIC issues clarification on payment AIDC by EOU under various situations [Read Circular]

CBIC - clarification on payment - AIDC - EOU - Taxscan

The Central Board of Indirect Taxes and Customs (CBIC) issued the  clarification on payment Agriculture Infrastructure and Development Cess (AIDC) by EOU under various situations and amendment to Circular no. 35/2016-Customs dated July 29, 2020.

In case of EOU selling finished goods in DTA, BCD exempted on import of inputs used in such finished goods is to be paid. On payment of such BCD by EOU at the time of clearance of finished goods it is treated as if no exemption of BCD was allowed to the EOU under Notification No. 52/2003-Customs dated March 31, 2003.

Once it is deemed that no exemption of BCD on inputs is allowed which were imported under exemption Notification No. 52/2003-Customs dated 31.03.2003, AIDC exemption under Notification no. 11/2021-Customs dated February 1, 2021 also gets denied on such inputs and the same is also required to be paid by EOU.

In addition to clearance of goods in DTA there are many situations like clearance of inputs; capital goods; packing material suitable for repeated use such as empty cones, bobbins, containers; leftover textile fabric or textile material etc. or exit from the EOU scheme.

In such cases duty/tax of which exemption under Notification No. 52/2003-Customs dated March 31, 2003 was availed at the time of import is required to be paid at the time of clearance.

In case of clearance of capital goods, applicable depreciation is allowed for denial of exemption. Unutilized leftover textile fabric or textile material is allowed to be cleared into DTA on payment of duty leviable at the time of import but for the exemption on transaction value as if the goods have been manufactured in that unit.

Exemption of duty/tax on goods imported under Notification No. 52/2003-Customs dated 31.03.2003 is also denied on account of breach of various conditions of EOU scheme. Once EOU is required to pay back BCD for which exemption was claimed and allowed under Notification No. 52/2003-Customs dated 31.03.2003 at the time of import then exemption of AIDC, if availed, in all such situations shall also be denied.

Thus, EOU shall be required to pay AIDC in the manner of payment of BCD against the goods imported under exemption Notification No. 52/2003-Customs dated 31.03.2003 under various situations.

“EOU/STP/EHTP are required to maintain and also submit digital copy of Form – A to Circular no. 35/2016-Customs dated 29.07.2016, by 10th of month to proper officer, which captures the summary of receipt, removal, returns and balance of imported goods under Notification No. 52/2003-Customs dated 31.03.2003. Copy of Quarterly Performance Report and Annual Performance Reports [QPR/APR] are also required to be submitted to jurisdictional AC/DC of Customs as mandated by DGFT Public Notice no. 36/2015-2020 dated 04.09.218. Though QPR/APR contain details of various activities including revenue contribution by EOUs but these are reflected in consolidated manner and these reports may be a monitoring tool for departmental officers with limitations. However, for effective and monthly monitoring of exemption of duty/taxes availed under Notification No. 52/2003-Customs dated 31.03.2003, the said Form ‘A’ is amended and revised Form ‘A’ is annexed herewith. Circular no. 35/2016-Customs dated 29.07.2016 may be treated as amended to above extent,” the CBIC said.

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