Invalidation under epcg

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2015 Hi,

We are an EPC contactor to EPCG license holder.
Now if we import any component/input for the capital goods to be manufactured indigenously without Invalidation letter/ARO by paying custom duty,
is there any way to recover/claim for refund in case EPCG holder doesn't issue us invalidation letter/ARO?

Guest

Guest (Expert)

08 June 2015 Hello,

If our understanding is right, you prefer to pay import duty for your import, process the same and sell it to EPCG license holder in India. You want to know if you will get refund of such import duty.

In our opinion, since you are selling the manufactured product to EPCG license holder in India, you will not get refund. However you will get credit of SAD and Additional excise duty paid against VAT and Excise duty.

But If you use the imported inputs, manufacture the same and export it, you will get full refund.

Hope you got clarity on your query.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2015 Thanks for ur prompt input. So what i understand is as follows.
Since in absence of invalidation, the bcd which would hv been exempted/nil becomes a cost and can't b claimed for any refund.

Pls clarify the said doubt.
Thanks

Guest

Guest (Expert)

08 June 2015 Unfortunately yes. This is because the export incentives like EPCGs are intended only for generating exports.

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2015 Thanks again. But one last query .

So the same benefits can b availed in case of ARO issued in favour of main contractor/supplier if invalidation isn't available.

Could u pls update us on the minimum requirements for requesting ARO from EPCG holder in place of invalidation and how ARO is different from invalidation.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now