Import machine without paying customs duty and export responsibility

- Antenna-Vivek Mehta

- Customs duty can be paid without the burden of interest only when the raw material is imported without paying the customs duty and then the finished product is not exported.

The Government of India has announced a Customs Bonded Ware House Scheme for the country's manufacturers. Machinery can be imported under this scheme without paying duty and without obligation to export. Similarly, if the finished product manufactured from imported raw materials is exported, it will not be forced to pay import duty. Even if the finished goods are destroyed in the warehouse in this way, the obligation to pay customs duty on the import of raw materials for it will not be burdened. Yes, new companies can take advantage of this scheme. But before taking advantage of this, he needs to get a clear understanding of the pros and cons of the scheme. Yes, the manufacturers who come forward to avail the benefits of this scheme will not be given benefits under other schemes i.e. RoadTap-Remittance of Duties and Taxes on Export Products or the draw back scheme.

Thus, the notification for this scheme was issued in October 2016. But very few people know about the plan. Manish Jain, an expert on imports, says, "Under the scheme, manufacturers are allowed to import machinery to India without paying customs duty. It is also not burdened with the obligation to export. Yes, if the importer of the machine exports the products manufactured through it, he will not have to pay customs duty on the input. If the manufacturers sell the machine-made products in the Indian market, they will be asked to pay the duty on the imported machinery. The machine will be asked to pay the duty which was not paid while importing. This duty will not be asked to pay a lump sum. Thus, from the date of import of the machinery till the goods produced by the machine are sold in the local market, the burden of paying duty will be relieved.

There are two major benefits to this scheme. One, imported machinery becomes completely duty free. Second, the customs duty to be paid at the time of import of imported raw materials will not be paid till the moment of sale of the finished product. If a manufacturer has to stock the raw material, they can import it without worrying about customs duty. He will also not have to pay interest on the amount for late payment of customs duty. Yes, he should have exported the products he made for it. If the rest of the raw material is destroyed in the warehouse then import duty will not be paid on it. If these raw materials are sold to someone else in India, they will have to pay import duty. In the same way, if the finished products are made from raw materials and sold in the Indian market, then the customs duty on imported raw materials will have to be paid. Yes, they will not be given the benefit of draw back under section 4 of the Customs Act. Also, they will not be given the benefit of road tape.

To avail this scheme, you have to contact the Customs Department and express your interest in the scheme. You have to apply for this. Along with this application documents related to PAN card, Aadhaar card, land layout have to be provided. Based on that, approvals will have to be sought for the Customs Commissioner of the area to avail the benefits of the scheme.

There is another benefit to this scheme. Exporters who have not been able to get a refund of GST-Goods and Services Tax for exported goods will also be able to get a refund under this scheme. However, Export Oriented Units and Advance License Holders are not given the benefit of this scheme. To avail the benefit of this scheme, one can also apply for construction of warehouse by seeking approval from the Customs Commissioner of the area. You can also apply for permission to carry out manufacturing and other operations in a bonded ware house.