Sales of Capital goods by 100% EOU
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 June 2011
Please let us know the formalities on Customs/Excise and Sales tax to be complied with by a 100% EOU for Sales of its plant and machineires imported without payment of duty to a another customer in India.
What precautions should be taken by the purchaser on such cases?
What precautions should be taken by the purchaser on such cases?
28 June 2011
link is :-
http://www.mumbaicustoms.gov.in/scripts/eou.asp
http://bangalorecustoms.gov.in/eou.htm
http://www.mumbaicustoms.gov.in/scripts/eou.asp
http://bangalorecustoms.gov.in/eou.htm
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 June 2011
Dear Sir,
It is mentioned that Customs Duty @ 10% per anum has to be paid on Depreciated value. Assuming an asset has been imported for Rs. 5 Crores 5 years back duty free, what is the duty to be paid in case this asset is to be sold in India to a buyer?
It is mentioned that Customs Duty @ 10% per anum has to be paid on Depreciated value. Assuming an asset has been imported for Rs. 5 Crores 5 years back duty free, what is the duty to be paid in case this asset is to be sold in India to a buyer?
29 June 2011
please check from above mentioned link.
also noted that:-
After the approval from the Development Commissioner concerned, the manufacturing and other activities have to be undertaken under customs bond for which formal application is to be made to the jurisdictional Assistant Commissioner/ Deputy Commissioner of the Customs/ Central Excise for issuance of a Private Custom Bonded Warehouse Licence under section 58 and 65 of the Customs Act, 1962. The application shall be accompanied by the following documents/information: -
Copy of notification whereunder the place (proposed location of unit) has been declared as warehousing station under section 9 of the Customs Act. In case the approved place is not a notified warehousing station, a separate application for issuance of such notification is to be submitted to the Commissioner of Customs through the jurisdictional Assistant Commissioner/ Deputy Commissioner.
Copy of LOI/LOP issued by Development Commissioner concerned and LUT accepted by the Development Commissioner.
Details of the premises including ground plan, purchase/rent/lease deed, allotment letter from Industrial Development Corporation/ Authority (if any)
Details about the constitution of the firm/company including its Proprietor/Partners/Directors etc.
Project Report indicating stage wise manufacturing process.
List of raw material, consumables and capital goods etc. required.
Undertaking that cost recovery and other charges shall be paid.
After verification of the premises and relevant documents, the requisite licence under section 58 and 65 of the Customs Act will be issued by the Assistant Commissioner/ Deputy Commissioner Customs/ Central Excise on priority basis.
B-17 Bond:
B-17 bond is a multi – purpose surety bond which the unit has to execute with the Jurisdictional Assistant/ Deputy Commissioner Customs/ Central Excise on a non-judicial stamp paper of Rs. 300/-. Format of the Bond is prescribed under Notification No. 6/98 CE (N.T) dt. 2-3-98.
B-17 Bond is a surety bond and in case valid surety cannot be arranged security @5% of the bond amount has to be furnished. The bond amount shall be equal to 25% of the duty foregone on the capital goods required in the next 5 years plus duty foregone on the value of raw material for a period of 3 months.
B-17- Bond covers the following activities:-
Duty free import/ procurement of goods as per relevant notification and warehousing/storage in the unit and their utilization.
Transhipment of import/ export of goods duty free between port of import/ export and units premises.
Movement of duty free goods for job work and return.
Temporary clearance for repair and display in exhibitions, testing/ approval etc.
However it dose not cover differential duty amount against advance DTA sale for which a separate bond is to be executed.
The unit has also to take a Central Excise Manufacture Code No. from the Superintendent, Central Excise to enable them to sell in the domestic market.
The Development Commissioner is empowered to grant approvals on the following matters: -
Import of additional capital goods
Enhancement of production capacity
Broad-banding/diversification
Change in name/ constitutions
Change of location/expansion
Extension of validity of LOP/LOI/LOA:
Import of Office equipment:
Merger of two or more EOU/SEZ Units
Import of spares and accessories of DG sets
Eligibility certificates for grant of employment visa to low level foreign technicians to be engaged by EOUs as per Ministry of Home Affairs Letter No. 250227/7/99-F-1 dated 20-9-1999 (Annexure-XI).
Sale of goods in DTA.
De-bonding/ Exit from EOU scheme.
Approval from State Government Agencies:
The unit has to secure approval for its wiring and electrical plan from the Electrical authorities.
It has also to secure power allocation and wiring approval from the State Electricity Board.
The industrial water supply is undertaken by the
The unit has to take a registration under the State Government Sales Tax Act and Central Sales Tax Act.
In case the unit already has a registration with the State Sale Tax Department the address of the additional premises should also be endorsed in the registration certificate.
The unit has also to take Small Scale Industry (SSI) Registration from the District Industries Center to apply for State Government’s Investment Subsidy.
In case there are effluents or emissions the unit has to secure approval form the Pollution Control Board.
Every Zone has a statutory Single Window Clearance Board.
also noted that:-
After the approval from the Development Commissioner concerned, the manufacturing and other activities have to be undertaken under customs bond for which formal application is to be made to the jurisdictional Assistant Commissioner/ Deputy Commissioner of the Customs/ Central Excise for issuance of a Private Custom Bonded Warehouse Licence under section 58 and 65 of the Customs Act, 1962. The application shall be accompanied by the following documents/information: -
Copy of notification whereunder the place (proposed location of unit) has been declared as warehousing station under section 9 of the Customs Act. In case the approved place is not a notified warehousing station, a separate application for issuance of such notification is to be submitted to the Commissioner of Customs through the jurisdictional Assistant Commissioner/ Deputy Commissioner.
Copy of LOI/LOP issued by Development Commissioner concerned and LUT accepted by the Development Commissioner.
Details of the premises including ground plan, purchase/rent/lease deed, allotment letter from Industrial Development Corporation/ Authority (if any)
Details about the constitution of the firm/company including its Proprietor/Partners/Directors etc.
Project Report indicating stage wise manufacturing process.
List of raw material, consumables and capital goods etc. required.
Undertaking that cost recovery and other charges shall be paid.
After verification of the premises and relevant documents, the requisite licence under section 58 and 65 of the Customs Act will be issued by the Assistant Commissioner/ Deputy Commissioner Customs/ Central Excise on priority basis.
B-17 Bond:
B-17 bond is a multi – purpose surety bond which the unit has to execute with the Jurisdictional Assistant/ Deputy Commissioner Customs/ Central Excise on a non-judicial stamp paper of Rs. 300/-. Format of the Bond is prescribed under Notification No. 6/98 CE (N.T) dt. 2-3-98.
B-17 Bond is a surety bond and in case valid surety cannot be arranged security @5% of the bond amount has to be furnished. The bond amount shall be equal to 25% of the duty foregone on the capital goods required in the next 5 years plus duty foregone on the value of raw material for a period of 3 months.
B-17- Bond covers the following activities:-
Duty free import/ procurement of goods as per relevant notification and warehousing/storage in the unit and their utilization.
Transhipment of import/ export of goods duty free between port of import/ export and units premises.
Movement of duty free goods for job work and return.
Temporary clearance for repair and display in exhibitions, testing/ approval etc.
However it dose not cover differential duty amount against advance DTA sale for which a separate bond is to be executed.
The unit has also to take a Central Excise Manufacture Code No. from the Superintendent, Central Excise to enable them to sell in the domestic market.
The Development Commissioner is empowered to grant approvals on the following matters: -
Import of additional capital goods
Enhancement of production capacity
Broad-banding/diversification
Change in name/ constitutions
Change of location/expansion
Extension of validity of LOP/LOI/LOA:
Import of Office equipment:
Merger of two or more EOU/SEZ Units
Import of spares and accessories of DG sets
Eligibility certificates for grant of employment visa to low level foreign technicians to be engaged by EOUs as per Ministry of Home Affairs Letter No. 250227/7/99-F-1 dated 20-9-1999 (Annexure-XI).
Sale of goods in DTA.
De-bonding/ Exit from EOU scheme.
Approval from State Government Agencies:
The unit has to secure approval for its wiring and electrical plan from the Electrical authorities.
It has also to secure power allocation and wiring approval from the State Electricity Board.
The industrial water supply is undertaken by the
The unit has to take a registration under the State Government Sales Tax Act and Central Sales Tax Act.
In case the unit already has a registration with the State Sale Tax Department the address of the additional premises should also be endorsed in the registration certificate.
The unit has also to take Small Scale Industry (SSI) Registration from the District Industries Center to apply for State Government’s Investment Subsidy.
In case there are effluents or emissions the unit has to secure approval form the Pollution Control Board.
Every Zone has a statutory Single Window Clearance Board.
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 June 2011
I have not understood the answers properly. My question is very specific. An EOU in India has imported Machineries worth Rs. 5 Croes without payment of Customs Duty 10 years back. Please let me know the Customs Duty liability in case the machinery is to be sold to some new buyers ( who is not an EOU) in India. What precautions the new Indian Buyer should take care to safeguard his interest on this purchases.
30 June 2011
for more info:-
read EPCES CIRCULAR NO. 1 DATED 1.4.2003
and :-
http://bangalorecustoms.gov.in/eou.htm
read EPCES CIRCULAR NO. 1 DATED 1.4.2003
and :-
http://bangalorecustoms.gov.in/eou.htm
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