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| SAD Refund |
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| Refund of SAD (Special Additional Duty) is being granted by the customs authorities
in terms of Notification No. 102/2007 DT. 14.09.2007.
A careful perusal of the notification reveals that SAD paid at the time of
importation has to be paid back if the goods are sold in the domestic market and
suffer local sales tax. |
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| CONVERSION OF 100% EOUS into DTA UNITS |
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| The tax benefits enjoyed by the 100% EOUs are not likely to be extended beyond 31st March 2011. Therefore, many 100% EOUs may contemplate moving away to normal units, commonly known as Domestic Tariff Area (DTA) units. This article throws light on the steps to convert to DTA units from EOU status: |
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| ACCREDITED CLIENT'S PROGRAMME AND RISK MANAGEMENT SYSTEM |
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| This scheme is a replacement of earlier schemes self assessment scheme, green channel facility and fast track clearance. Based on internationally accepted method of assessing various types of cargo the Inter-ministerial Group recommended in 2005 Risk Management System as a measure of trade facilitation . This system requires examination of only high risk cargo and also provides fro a special customs clearance facility for authorized persons (Accredited Clients) having a good track record.
Under the RMS goods will be allowed clearance based on self assessment without examination after checking only marks and numbers of the package. Other consignments will be selected for customs check (opening and examination) depending on the risk by RMS. The objective of RMS is to provide optimum balance between trade facilitation and enforcement of regulatory provision. The Risk Management Division managed by Directorate of Systems & Management with its Hqrs at Mumbai is concerned with developing the intelligence, evaluating the risk and carrying out risk management techniques.
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| CLASSIFICATION |
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| Manufacturers or Traders of any goods should be aware of the Harmonized system of Numbering (HSN) of their goods by way of Classification. The Classification of goods has revenue implications as well. Very often, goods are classified out of ignorance keeping in view the lower rates of duty or perceived exemptions available or just here say. The scientific approach would be to look into section notes, chapter notes and rules of classification. |
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| CONCEPT NOTE ON CLUSTER FORMATION |
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| SMEs contribution constitutes 45% of Indian Exports. But there are many SMEs who are left out in the fold. They are not able to contemplate International Marketing due to variety of reasons like:
a) Lack of market intelligence
b) Finance
c) Technology
d) Human resource
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| ISSUE V: DUTIES UNDER THE CUSTOMS ACT |
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| One may be surprised to note that the Customs Act which empowers the Government to levy, collect and exempt taxes does not specify the type and rate of duties to be paid at the time of importation. Section 12 of the Customs Act, which is considered as the Charging session specifies that Duties of Customs shall be levied at such rates as may be specified under the Customs Tariff Act 1975 (CTA).
So, it is the CTA 1975 that specifies the type and the rate of duties. This article seeks to throw light on the type of duties that are imposed by the Government at the time of import.
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| CLASSIFICATION UNDER THE CUSTOMS TARIFF ACT |
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| The classification of goods would continue to be very relevant and import unless all the goods attract the same rate of duty. It is impossible to envisage a situation where all the excisable goods will attract the same rate of duty. For instance, it is not possible to imagine that a medicinal item and a cosmetic item can be subjected to the same rate of duty. Similarly, an item which is going into research and development of or nuclear reactor or for atomic energy projects or any other Programme concerning to public health, safety or defence would attract the same rate of duty as for goods which are meant for either use as a comfort or as a luxury. Keeping in view the socio-economic objectives, considerations of public heath, national security and the interest permitting research and development as well as the needs of agriculture which is becoming increasingly mechanized need to protect small scale sector and non-power operated activities and host of other factors, the Government charges customs duty at different rates on different products. So long as, there are different rates notified for different commodities, the need for proper classification would always remain |
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| ISSUE IV: CLASSIFICATION |
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| Manufacturers or Traders of any goods should be aware of the Harmonized system of Numbering (HSN) of their goods by way of Classification. The Classification of goods has revenue implications as well. Very often, goods are classified out of ignorance keeping in view the lower rates of duty or perceived exemptions available or just here say. The scientific approach would be to look into section notes, chapter notes and rules of classification |
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| ISSUE III: BANK REALIZATION CERTIFICATE |
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| Many exporters, of late, have received communication from the drawback department of the Chennai customers asking them to produce Bank’s realization certificates certifying that they have realized payment from their customers abroad.
In the event of the exporter, either not realizing the payment from the customers or failure to obtain the said certificates from the bankers, the exporters are under obligation to repay the drawback obtained with interest calculated from the date of receipt of drawback from the department.
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| SAD Refund |
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| Refund of SAD (Special Additional Duty) is being granted by the customs authorities in terms of Notification No. 102/2007 dt. 14.09.2007.
A careful perusal of the notification reveals that SAD paid at the time of importation has to be paid back if the goods are sold in the domestic market and suffer local sales tax.
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in pdf |
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| ADVANCE LICENCE Vs DUTY DRAWBACK |
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| Quite often, one is faced with a dilemma as to which Scheme to choose. “Should I go for Advance Licence (DEEC) Scheme or opt for Duty Drawback” is the question that is to be answered. To be honest, many do not even contemplate going in for Duty Drawback, as there is notional loss of interest, because Drawback is obtained after export. On the other hand, Advance Licence Scheme looks attractive, as Raw Materials, Components and Intermediates required for export can be obtained on Pre-export basis at Nett of Duty Prices. Therefore, there is apparently logic in favour of opting for Advance Licence Scheme.
But, a prudent practitioner of exim matters should not be weighing the notional loss of interest alone in the choice of scheme. He would have several factors as below before deciding the scheme :
Is material sought to be imported and exported figure in SION (Standard Input- Output Norms) List ?
Is the Unit eligible for Bank Guarantee exemption in terms of PN 112/2003 ?
Is there any proper system and procedure for monitoring Export Obligation ?
If the answer to the question no. 1 is negative and application for Advance Licence is to be made on “No Norms” basis, no doubt Licence is issued by the Regional Licensing Authorities but with a rider that the decision of Advance Licensing Committee (ALC), New Delhi is final as far as Input-Output ration is concerned. Let us say in a hypothetical situation, the ALC is not convinced of the numericals provided by the Unit and decides to reject the case, where do the Unit stand ?
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