We have received an 2 orders from a Defence PSU manufacturing company which can issue us a Custom Duty Exemption Certificate (CDEC). The end user is Indian Army exepmt from paying custom duty.
For the 1st order we have to import the equipment from a UK based co. and supply it as is with no value addition.
In the 2nd order, we have to import components seperately from 3 differnt cos. based in UK/US and have to assemble the same into a final product. While we will not buy any locally manufactured components, we will be using tools, test & measurement devices and consumables (glue, binding wires and corrugated boxes for packaging) bought from the Indian Market.
How do we use the CDEC certificates in each of these case and save the D-PSU the Custom Duty payable.
We will be charging them VAT as applicable.
Since we propose this as an ongoing activity, will we benefit to apply for a Custom bonded area. Are there any challenges, since we do have some non-military customers aswell?
CAclubindia
