Procedure for Duty Credit for Goods Exported under RoSCTL Notified

·    List of 14 Segments not eligible for credits of special goods including restricted or duty paid goods for Duty Credit, goods “taken into use” after manufacture excluded, (term not defined, testing or software loading may be covered in term)

·    Cap on eligible value at 1.5 times of the market price for RoSCTL credit

·    Proceeds to be realized within period allowed in FEMA

·    Only EDI station export recognized, Land Customs without EDI excluded

·    Customs Commissioners has powers to cancel scrip for violation of law, recovery of duty credit plus to be initiated under Sec.142 of CA, 1962

·    Both transferor and transferee liable for suspension of further credit in default cases

[Notification No. 77/2021-Customs (N.T.) dated 24 September, 2021]

Seeks to notify the manner to issue duty credit for goods exported under the continuation of Scheme for Rebate of State and Central Taxes and Levies (RoSCTL)

·    Cancellation of duty credit.-

·    Recovery of amount of duty credit

·    Recovery of amount of duty credit where export proceeds are not realised

G.S.R. … (E) - In exercise of the powers conferred by sub-section (1) of section 51B of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as “the said Act”), the Central Government, hereby notifies the manner of issue of duty credit for goods exported under the Scheme for Rebate of State and Central Taxes and Levies (hereinafter referred to as the “Scheme”), subject to such conditions and restrictions as specified herein, in accordance with Government of India, Ministry of Textiles’ notification No. 12015/11/2020-TTP dated the 13th  August, 2021.

2. Such duty credit shall be subject to the following conditions, namely:-

(1) that the duty credit is issued -

(a)   against exports of garments and made-ups (hereinafter referred to as the said goods) and their respective rate and cap as listed in Schedules 1, 2, 3 and 4 to the notification of Government of India, Ministry of Textiles’ notification No. 14/26/2016-IT (Vol.II), dated the 8th March, 2019 for the Scheme:

Provided that the value of the said goods for calculation of duty credit to be allowed under the Scheme shall be the declared export Free on Board (FOB) value of the said goods or up to 1.5 times the market price of the said goods, whichever is less;

(b) against claim of duty credit under the Scheme made by an exporter by providing the appropriate declaration at the item level in the shipping bill or bill of export in the customs automated system;

(c)   against the shipping bill or bill of export, presented under section 50 of the said Act on or after the 1st day of January, 2021, and where the order permitting clearance and loading of goods for exportation under section 51 of the said Act has been made;

(d)   after the claim is allowed by Customs upon necessary checks, including on the basis of risk evaluation through appropriate selection criteria, and after filing of export manifest or export report;

(e)   in accordance with any rules or regulations issued in relation to duty credit, e-scrip or electronic duty credit ledger;

(2) that such duty credit shall be used for payment of the duty of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) on goods when imported into India;

(3) that the export categories or sectors listed in Table-1 annexed hereto shall not be eligible for duty credit under the Scheme;

(4) that the duty credit allowed under the Scheme, against export of goods notified vide notification No. 14/26/2016-IT (Vol.II), dated the 8th March, 2019 for the Scheme, shall be subject to realisation of sale proceeds in respect of such goods in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), failing which such duty credit shall be deemed to be ineligible;

(5) that the imports and exports are undertaken through the seaports, airports or through the inland container depots or through the land customs stations which allow the bill of entry and shipping bill or bill of export to be presented and processed electronically on the customs automated system;

(6) that the exporter has realised the sale proceeds against export of goods made earlier by the said exporter where the period allowed for realisation, including any extension of the said period by the Reserve Bank of India, has expired:

Provided that duty credit shall be issued by Customs in excess of the ineligible amount of duty credit pertaining to the unrealised portion of sale proceeds against export of goods made earlier:

Provided further that if the Principal Commissioner of Customs or Commissioner of Customs has reason to believe, on the basis of risk evaluation or on the basis of enquiry, that the claim of duty credit made by an exporter on export goods may not be bona fide, he may direct, for reasons to be recorded in writing, to allow duty credit after realisation of sale proceeds of such exports;

(7) that duty credit under the Scheme for exports made to Nepal, Bhutan and Myanmar shall be allowed only upon realisation of sale proceeds against irrevocable letters of credit in freely convertible currency established by importers in Nepal, Bhutan and Myanmar in favour of Indian exporters for the value of such goods.

3. Cancellation of duty credit.- (1) Where a person contravenes any of the provisions of the said Act or any other law for the time being in force or the rules or regulations made thereunder in relation to exports to which the duty credit relates, or in relation to the e-scrip, the Principal Commissioner of Customs or Commissioner of Customs having jurisdiction over the customs station of registration of the e-scrip may, after enquiry, pass an order to cancel the said duty credit or e-scrip.

(2) Where the e-scrip is so cancelled, the duty credit amount in the said e-scrip shall be deemed never to have been allowed and the proper officer of Customs shall proceed to recover the duty credit amount used in such e-scrip or transferred from such e-scrip.

(3) The proper officer of Customs may, without prejudice to any other action that may be taken under the said Act or any other law for the time being in force, suspend the operation of the said e-scrip or the electronic duty credit ledger of such exporter or any duty credit transferred from such e-scrip, during pendency of the enquiry under sub-clause (1).

4. Recovery of amount of duty credit.- (1) Where an amount of duty credit has, for any reason, been allowed in excess of what the exporter is entitled to, the exporter shall repay the amount so allowed in excess, himself or on demand by the proper officer, along with interest, at the rate as fixed under section 28AA of the said Act for the purposes of that section, on that portion of duty credit allowed in excess, which has been used or transferred, and where the exporter fails to repay the amount along with interest, as applicable, it shall be recovered in the manner provided in section 142 of the said Act.

(2) The duty credit amount that an exporter is so required to repay under sub-clause (1) shall be deemed never to have been allowed, and if the exporter fails to repay the said amount within a period of fifteen days along with interest so demanded, then the proper officer of Customs may, without prejudice to any action against the exporter, proceed for recovery of the said duty credit amount from the transferee in the manner as provided in section 142 of the said Act.

5. Recovery of amount of duty credit where export proceeds are not realised.- (1) Where an amount of duty credit has been allowed to an exporter but the sale proceeds in respect of such export goods have not been realised by the exporter in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), the exporter shall, himself or on demand by the proper officer, repay the amount of duty credit, along with interest, at the rate as fixed under section 28AA of the said Act for the purposes of that section, within fifteen days of expiry of the said period.

(2) In case any extension of the said period for realisation of sale proceeds has been given by the Reserve Bank of India and the exporter produces evidence of such extension to the proper officer, and if the said sale proceeds are not realised in such extended period, the exporter shall repay the said amount of duty credit along with the said interest, within fifteen days of expiry of the said period.

(3) If a part of the sale proceeds has been realised, the amount of duty credit to be recovered shall be the amount equal to that portion of the amount of duty credit allowed which bears the same proportion as the portion of the sale proceeds not realised bears to the total amount of sale proceeds.

(4) Where the exporter fails to repay the duty credit amount within the said period of fifteen days, the said duty credit shall be deemed never to have been allowed and it shall be recovered, along with the said interest, in the manner as provided in section 142 of the said Act.

(5) The proper officer of Customs may, without prejudice to any action against the exporter, proceed for recovery of said duty credit amount from the transferee in the manner as provided in section 142 of the said Act.

6. During the pendency of any recovery, as provided in clauses 4 and 5, no further duty credit, on any subsequent exports, shall be allowed to such exporter till the time such recovery is made and any unutilised duty credit with the exporter or the transferee shall be suspended pending such recovery.

Explanation – For the purposes of this notification:-

(a)   “claim” means a claim of duty credit under the Scheme made by an exporter in the shipping bill or bill of export by providing the appropriate declaration at the item level in the said shipping bill or bill of export in the customs automated system;

(b)   “duty credit” means the amount of credit of duty allowed by Customs against a claim under the Scheme;

(c)   “electronic duty credit ledger” means the ledger in the customs automated system relating to a person who is the recipient of duty credit or to person to whom the duty credit is transferred;

(d)   “e-scrip” means the scrip, created in the ledger for duty credit, as mentioned in Explanation 1 of section 28AAA of the said Act;

(e)   “export manifest” or “export report” means the reference to the terms used in Section 41 of the said Act;

(f)   “Foreign Trade Policy” means the Foreign Trade Policy published by the Government of India in the Ministry of Commerce and Industry and as amended from time to time;

(g)   “garments and made-ups” shall have the same meaning as assigned to them in the Government of India, Ministry of Textiles’ notification No. 12015/11/2020-TTP, dated the 13th  August, 2021 notifying the continuation of Scheme for Rebate of State and Central Taxes and Levies on Export of Apparel/Garments and Made-ups (RoSCTL);

(h)   “proper officer” means Deputy Commissioner or Assistant Commissioner of Customs.

TABLE-1

Sl.No.

Export categories or sectors ineligible for duty credit

(1)

(2)

1.

Goods which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC-HS

2.

Export of imported goods covered under paragraph 2.46 of Foreign Trade Policy

3.

Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India

4.

Goods subject to minimum export price or export duty

5.

Deemed exports under Foreign Trade Policy

6.

Goods manufactured or exported by any of the units situated in Special Economic Zone/ Free Trade Warehousing Zone/ Export Processing Zone

7.

Goods manufactured or exported by a unit licensed as hundred per cent Export Oriented Unit

8.

Goods exported under Advance Authorisation or Duty Free Import Authorisation issued under the relevant Foreign Trade Policy:

 

Provided that where exports are made against Special Advance Authorisation issued under paragraph 4.04A of the Foreign Trade Policy 2015-20 in discharge of export obligations in terms of notification No. 45/2016-Customs, dated the 13th August, 2016, the rates of the RoSCTL Scheme specified in Schedules 3 and 4 to the Ministry of Textiles’ notification No. 14/26/2016-IT, dated the 8th March, 2019 shall apply.

9.

Goods manufactured and supplied by units in Domestic Tariff Area to units in Special Economic Zone/Free Trade Warehousing Zone

10.

Goods manufactured in Special Economic Zone/ Free Trade Warehousing Zone/ Export Oriented Unit/ Export Processing Zone and exported through DTA unit

11.

Goods manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962)

12.

Goods availing the benefit of the notification No. 32/1997-Customs, dated the 1st April, 1997

13.

Goods for which claim of any duty credit is not filed in a shipping bill or bill of export in the customs automated system

14.

Goods that have been taken into use after manufacture or reconditioned/ upgraded/ worn/ used clothes.

[F. No. CBIC-140605/12/2021-O/o Dir(Drawback)-CBEC]