Govt. notifies One-time Waiver of Customs Duty and inspection requirement [Read Instruction]

Government - One time waiver - Custom Duty - inspection requirement - Taxscan

The Government notified the One-time waiver of Custom Duty and inspection requirement in case of debonding of IT/ITES units in SEZs and exemption on the filing of BOE for goods sold by IT/ITES SEZ unit which were initially procured on payment of duty and not used for authorised operations.

The NASSCOM recommended that as part of the current debonding process, physical inspection of duty free goods is done by the authorities to ascertain tax liability depending upon the remaining life of such equipment. Given the fact that the majority of employees are working from home using the duty free assets, the requirement of physical inspection of duty free assets would lead to significant operational and administrative burden for the units.

Considering the short shelf life and high depreciation value for IT assets, suggested that the government should consider a one time waiver of custom duty and inspection requirement on such IT assets, to expedite the process of surrendering SEZ benefits.

The government remarked that as part of exiting from SEZ scheme under rule 74 of SEZ Rules, physical inspection of duty free goods is done by the SEZ Customs officers to ascertain tax liability depending upon the remaining life of such equipment. The existing IT/ITES SEZ Unit may opt for simple payment of duty without Inspection subject to the condition that they produce all relevant imports and other documents of goods to establish their identity and to avoid the requirement of physical inspection of duty free goods.

The NASSCOM further recommended that Goods imported / procured by IT ITES SEZ unit on payment off applicable duties and are not used for authorised operations are allowed to sold to DTA without payment of customs duty and without filing bill of entry for homes consumption as per Rule 49 (4)(a) read with proviso to Rule 48 (3) of SEZ Rules, 2006.

However, AO or SO are insisting to file a bill of entry for home consumption with nil duty everk for DTA sale of goods as such which were initially procured on payment of applicable duties and not used for authorised operations.

Instructions may be issued to the effect that filing of BOE is not required for goods sold by SEZ units which were initially procured on payment of duty and not used for authorised operations.

The government remarked that if an IT/ITES SEZ Units procured goods from DTA and supplied back to DTA under the provisions of Rule 48(3) of SEZ Rules, 2006, the movement of the goods may be done on the basis of of invoice only and filing of bill of entry in such cases is not required.

Whereas if an IT/ITES units import goods into SEZ after paying applicable duty and further clear it into DTA under Rule 49(4) (a) of SEZ rules, 2006 it would amount to import into DTA as per Customs act, thus, mandating the filing of Bill of Entry in such cases.

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