Sez Drawback Rules

Q. Our client in the USA asked us to deliver our goods to a SEZ unit and agreed to pay us in foreign currency. (ix) Credit for the drawback of duties or customs duties on such supplies of goods by the unit of the national customs territory to the zone unit or to the contracting authority shall be authorized only if payment for such supply of goods to the zone unit has been received in freely convertible foreign currency. The entity or promoter may purchase goods from the ILC on the basis of an invoice or transport document issued by the supplier without incurring exemptions, disadvantages and concessions. The answer is yes. Drawback is claimed only for customs duties, IGST customs duties and countervailing duties paid on imports of inputs for the manufacture of goods for export. It is not the VALUE of inputs or finished goods, but the duties paid on inputs and payable as patronage drawbacks. ATD supplies to SEZs are entitled to export benefits such as refund, right to rebate and prior approval, etc. Note 1.- For the purposes of this Regulation, `export incentives` include duty drawback, passbook system, rebates, pre-licensing or counting of earnings as export earnings or accounting for the proceeds as the fulfilment of export obligations under a scheme. 2. Where goods originating in the national customs territory by means of duty drawback or passbooks or under an export promotion programme are destroyed as a result of natural disasters, the zone unit shall be required to pay the duty drawback or customs passport system credit applied for in respect of those goods: (q) words and expressions used in this document and not defined; but are defined in the Act or rules made under this Act, have the meaning ascribed to them in the Act or rules respectively. The promoter or unit may apply for a refund or a customs authorization passport booklet if the export contract has been filed and the entity or developer does not intend to make such an application, the CDI supplier will be granted an appropriate exemption from liability to claim these benefits, provided that the DEPB system of the customs authorization package is available to the DTA supplier.

However, if the zone unit purchased the goods in the national tariff zone against payment of foreign currency, it is not required to refund the refund of customs duties or credit under the excise duty book system or any export incentives claimed for those goods. Goods may be used for purposes other than authorized transactions, or if the entity or developer fails to report the goods in accordance with these Regulations, a tax shall be levied on those goods as if they had been cleared for domestic consumption. We are a SEZ entity and have purchased goods from DTA suppliers necessary for the manufacture of our finished products for export to various countries. Rule 24(3) of the SEZ Rules 2006 states that “refunds or other similar benefits are permitted under the Customs and Central Excise Duty Refund Regulations, 2017, as amended, on the supply of goods by suppliers in the domestic tariff zone if payments for delivery are made from the unit`s foreign currency account.” According to clause 4.21(iii) of the FTP, “exports in SEZ units shall be taken into account in the performance of the export obligation, provided that the payment is made from the foreign currency account of the SEZ entity”. According to paragraph 5.11 of the HBP, “in the case of deliveries to SEZ units, the realization shall be made from the foreign currency account of the SEZ unit”. These conditions are not met in your case. (viii) The zone unit is required to obtain fictitious responsibility for the goods from the competent official of the zone on the same day if the goods are carried during working hours or immediately on the next working day if the goods are moved outside working hours. An entity may sell goods and services, including scrap metal or scrap metal or scrap metal or broken diamonds or by-products created during or in connection with the manufacturing process, in the domestic tariff zone against payment of customs or excise duties. (ii) the export of finished products from the premises of the employment office by third parties shall not be permitted; (iii) assets purchased by the area unit or developer referred to in points (i) and (ii) may be used by the owner only to carry out approved activities in the area; Entities operating under certain specific regimes such as FEZ/SWZ/EOU are expected to operate in a customs territory.

Any territory not under the jurisdiction of a customs territory shall be referred to as the national tariff territory. [2] (1) Subject to the procedure set out in section 22, where scrap, waste or scrap results from the destruction of goods within the meaning of Rule 12 of the Special Economic Zones Rules 2003, the zone unit shall be permitted to introduce the goods into the domestic tariff zone against payment of the duty applicable to such scrap and scrap in accordance with the provisions of section 76F (b) of the Act.