Clearance of Raw materials from EOU

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2011 An EOU Unit which had sourced materials without payment of Customs Duty/Excise Duty has disconitnued its production and had identified a local buyer in India who is not an EOU to sell these raw materials. What are the duties and taxes payable by EOU?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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07 July 2011 All the EOUs are required to execute a single all purpose bond i.e B-17 bond undertaking themselves to fulfil the conditions stipulated in the exemption notification of EOU scheme. This bond is taken to take care of the interests of revenue arising out of goods lost in transit, goods taken into Domestic Tariff Area for job work/ repair/ display etc but not brought back etc. The bond is executed with the jurisdictional Assistant Commissioner of Customs/Central Excise in charge of the unit. The format of the bond is prescribed vide notification No. 6/98-CE ( NT) dated 2-3-1998. The bond covers the activities which include, inter alia, transhipment of import /export goods between port of import/export and units' premises; duty-free import/procurement from the indigenous sources as per relevant notification and warehousing/storage in the unit; movement of duty-free goods for job work and return; temporary clearance for repair and display in exhibitions, testing/approvals etc.; and movement of goods against AR-4, AR-3A and CT-3 etc. and transfer from one warehouse to another. However, it does not cover the differential duty amount against advance DTA sale for which a separate bond is to be executed. The bond is taken for an amount equal to 25% of the duty forgone on the sanctioned requirement of capital goods plus the duty forgone on raw materials required for 3 months. Surety or security equivalent 5% of the bond amount in the form of bank guarantee is required to be given by the EOUs.

(Reference Board’s Circular Nos. 14/98-Customs, dated 10-3-1998, 42/98-Cus. dated 19-6-1998, 66/98-Cus, dated 15-9-98, 76/99-Cus, dated 17-11-1999, and 50/2000-Cus, dated 24-5-2000).

FOR MORE INFO:-
https://www.eouindia.gov.in/dta_cir_2.htm

https://www.eouindia.gov.in/dta_cir_15.htm

https://www.eouindia.gov.in/dta_cir_21.htm

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