Subject: Drawback of Integrated Tax and Compensation Cess paid on imported goods upon re-export under Section 74 of the Customs Act, 1962

Transcription

1 Circular No. 21/2017 -Customs F. No. 609/54/2017-DBK Government of India Ministry of Finance, Department of Revenue Central Board of Excise & Customs ***** New Delhi, dated 30 th June, 2017 To, Principal Chief Commissioners / Principal Directors General, Chief Commissioners / Directors General,s Principal Commissioners / Commissioners, all under CBEC Madam/Sir, Subject: Drawback of Integrated Tax and Compensation Cess paid on imported goods upon re-export under Section 74 of the Customs Act, 1962 As you are aware, Section 74 of the Customs Act, 1962 provides for drawback of duties paid at time of importation when the imported goods are re-exported. Hitherto this drawback inter alia comprised refund of basic customs duty and additional duties under Section 3 of the Customs Tariff Act (CTA), In this regard, Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 refer. 2. Under the GST regime, goods upon import shall be subject to integrated tax and compensation cess in terms of Sections 3(7) and 3(9) respectively of the CTA, Further, in terms of Section 3(12) of the CTA, 1975, the provisions of the Customs Act, 1962 and rules and regulations made thereunder relating inter alia to drawback shall apply to integrated tax and compensation cess also. Accordingly, drawback under Section 74 would include refund of integrated tax and compensation cess along with basic customs duty, etc. 3. In this regard, the definition of drawback under Rule 2 (a) of the Re-export Rules, 1995 has been suitably amended to include refund of duty or tax or cess as referred in the CTA, Notification No. 57/2017-Customs (N.T.) dated may be referred in this regard. 4. In order to prevent dual benefit while sanctioning drawback under Section 74 of the Customs Act, 1962, it may be ensured that a certificate duly signed by the Central/State/UT GST officer, having jurisdiction over the exporter is obtained, that no credit of integrated tax /compensation cess paid on imported goods has been availed or no refund of such credit or integrated tax paid on reexported goods has been claimed. All other extant instructions in respect of drawback claims under Section 74 remain unchanged. 5. Suitable Public Notice for information of the trade and Standing Order for guidance of the staff may kindly be issued. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. Yours faithfully, (Nitish K. Sinha) Joint Secretary to the Government of India

2 Circular No. 22/2017-Customs F. No. 609/46/2017-DBK Government of India Ministry of Finance, Department of Revenue Central Board of Excise & Customs To Principal Chief Commissioners/Principal Directors General, Chief Commissioners/Directors General, Principal Commissioners/Commissioners, all under CBEC New Delhi, dated 30 th June, 2017 Subject: Amendments effective from to the All Industry Rates of Duty Drawback and other Drawback related changes. Madam/Sir, Your attention is invited to Notification numbers 58/2017-Cus (N.T.) & 59/2017-Cus (N.T.), both dated , which are effective from These notifications relate to changes in the provisions of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 and All Industry Rates (AIR) of drawback stipulated earlier vide Notification no. 131/2016-Cus (N.T.) dated (as amended) respectively. 2. The salient features of changes introduced vide Notification no. 59/2017 dated are briefly given as follows: (a) Transition period: In order to ensure smooth transition to the GST regime, Government has allowed the extant Duty Drawback scheme to continue for a period of three months i.e. from to The exporter may, for exports made during this period, continue to claim the composite rates i.e. rates and caps given under columns (4) and (5) respectively of the Schedule of AIRs of duty drawback, subject to certain additional conditions. During the transition period, exporters can also claim Brand rate of duty/tax incidence as they have been doing earlier. The conditions imposed for claiming these composite rates aim to ensure that the exporters do not claim composite AIRs of duty drawback and simultaneously avail input tax credit of Central Goods and Services Tax (CGST) or Integrated Goods and Services Tax (IGST) on the export goods or on inputs and input services used in manufacture of export goods or claim refund of IGST paid on export goods. Further, an exporter claiming composite rate shall also be barred to carry forward Cenvat credit on the export goods or on inputs or input services used in manufacture of export goods in terms of the CGST Act, The exporters have to give a declaration and certificates as prescribed in this Notification at the time of export. Similar checks shall apply while determining the Brand rate of drawback. While a transition period of three months has been allowed, the exporters shall have an option to claim only Customs portion of AIRs of duty drawback i.e. rates and caps given under column (6) and (7) respectively of the Schedule of AIRs of duty drawback and avail input tax credit of CGST or IGST or refund of IGST paid on exports. (b) Changes in AIRs: Based on prevailing prices of inputs and export goods, budgetary changes, representations received and keeping in mind need for removing anomalies, certain changes have been made in AIRs. These interalia include

3 i. Para (17) of Notes and Conditions of Notification no. 131/2016-Cus (N.T.) dated has been amended to include the word melange so that melange textile materials covered in chapters 54 and 55 are treated as dyed; ii. iii. Customs rates and caps have been increased for certain marine products covered under chapters 3, 15, 16 and 23; For better product differentiation, two new tariff lines have been introduced. These relate to leather under chapter 41 and pillows/cushions/quilts/pouffles filled with poly-fil under chapter 94; iv. Caps have been enhanced for several textile items covered under chapters 52, 54, 55 and 56; v. Rates and caps have been enhanced for made up fishing and sports nets of other man-made textile materials covered under chapters 56 and 95 respectively; vi. vii. Leggings have been classified under tariff item instead of and ; and Customs rates have been reduced for nickel and articles thereof covered under chapter Further, vide Notification no. 58/2017-Cus dated , the work related to: (a) fixation of Brand rate of drawback has been transferred from Central Excise formations to Customs formations having jurisdiction over place of export. A separate circular is being issued to explain various related provisions, procedures, etc. (b) supplementary claims of drawback are now to be dealt only by Customs formations. For this purpose, references to Central Excise formations wherever appearing have been omitted from the said Drawback Rules, Some of the Customs formations are at present working under the jurisdiction of Commissioners of Central Excise. It may be noted that Central Excise officers have been designated as officers of Customs under the Customs Act, Accordingly, till the time jurisdictional Commissionerates of Customs, which will replace Central Excise Commissionerates hitherto performing Customs functions are notified and become functional, the jurisdictional Central Excise Commissionerates shall continue to discharge Customs functions as required under the Drawback Rules It is requested that the changes effected vide aforesaid notifications be gone through carefully. Suitable public notice and standing order should be issued for guidance of the trade and officers. 5. Any inconsistency, error or difficulty faced should be intimated to the Board. Yours faithfully, (Nitish K. Sinha) Joint Secretary to Government of India

4 Circular No. 23/2017 -Customs F. No. 609/46/2017-DBK Government of India Ministry of Finance, Department of Revenue Central Board of Excise & Customs *** New Delhi, dated 30 th June, 2017 To, Principal Chief Commissioners / Principal Directors General, Chief Commissioners / Directors General, Principal Commissioners / Commissioners, all under CBEC Madam/Sir, Subject: Fixation of Brand Rate of drawback under Rule 6 and Rule 7 of the Customs, Central Excise Duties & Service Tax Drawback Rules, 1995 in the GST scenario As you are aware, in terms of Rule 6 and Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the work pertaining to fixation of Brand rate of Drawback is undertaken by the Central Excise Commissionerate having jurisdiction over the factory where export goods are manufactured. In this context, Board s Circular No. 14/2003-Cus dated , DO letter No. 609/110/2005-DBK dated , Instruction No. 603/01/2011-DBK dated , Circular No. 29/2015-Cus dated and Circular No. 54/2016-Cus dated governing the procedure for handling of Brand rate work may be referred. Once the Brand rate letter (provisional or final) is issued by such Commissionerate, the respective ports of export are required to calculate and disburse the drawback amount to the exporter. This Circular explains the changes being brought about in Brand rate mechanism in the context of introduction of Goods and Services Tax (GST) w.e.f The input tax incidence of taxes covered in GST regime are to be neutralized through the refund mechanism provided through the GST laws. At the same time, a transition period of three months from date of introduction of GST has been provided i.e. from to by continuing the extant Duty Drawback scheme and amending the Drawback Rules, 1995 vide Notification No. 58/2017-Cus (N.T.) dated For exports made during this transition period, the exporter can claim All Industry Rate (AIR) or Brand rate of drawback for Customs, Central Excise Duties and Service Tax subject to certain additional conditions. These conditions aim to ensure that the exporter simultaneously does not avail input tax credit of Central Goods and Services Tax (CGST) or Integrated Goods and Services Tax (IGST) on the export goods or on inputs and input services used in manufacture of export goods or claim refund of IGST paid on export goods. Further, an exporter claiming drawback during transition period as per extant duty drawback provisions shall also be barred to carry forward Cenvat credit in terms of the CGST Act, 2017 on the export goods or on inputs or input services used in manufacture of export goods. The exporter also has to give the prescribed declaration and certificates (similar to declaration and certificate prescribed in Notification No. 59/2017-Cus (N.T.) dated for claiming composite AIR during transition time) at the time of application for fixation of Brand rate of drawback. At the same time, the exporter has the option of claiming the Brand rate of Customs duties and remnant Central Excise duties (in respect of goods given in Fourth Schedule to Central Excise Act, 1944) and avail input tax credit of CGST or IGST or refund of IGST paid on exports. 3. Further, in view of implementation of GST, Board has decided to re-organise the Customs functions hitherto handled by Central Excise formations. In this context, it has been

5 decided that w.e.f , the work pertaining to fixation of Brand rate will be dealt by the Customs Commissionerate having jurisdiction over the place of export from where the export of goods has taken place. In case the exports have taken place from more than one place, exporter shall file Brand rate application with the Principal Commissioner/ Commissioner of Customs having jurisdiction over any one of the places of export. Accordingly, Rule 6 and Rule 7 ibid have been suitably amended vide Notification No. 58/2017-Cus (N.T.) dated All Circulars/instructions issued till date w.r.t. fixation of Brand rate shall mutatis mutandis apply for work of fixation of Brand rate to be done by Customs formations in the GST scenario. However, verification of data given in the application if so required shall be got done through the Customs formation having jurisdiction over the factory where the export goods have been manufactured. 5. From , all fresh applications for Brand rate of drawback irrespective of date of export will be dealt as per these guidelines. The applications already filed with existing Central Excise formations prior to and pending shall be transferred along with all relevant documents to the Principal Commissioner/ Commissioner of Customs having jurisdiction over the place of export. In case an already filed application relates to exports from multiple places, the application should be transferred to the Principal Commissioner/ Commissioner of Customs having jurisdiction over any one of the places of export as per choice of the exporter. The exporter concerned may be requested to indicate his choice in this regard before the transfer of his application. For smooth transition of Brand rate related work to Customs formations, it is essential that transfer of documents is undertaken carefully and in close coordination with concerned Customs authorities without disruption, delay etc. 5.1 Some of the Customs formations are at present working under the jurisdiction of Commissioners of Central Excise. It may be noted that Central Excise officers have been designated as officers of Customs under the Customs Act, Accordingly, till the time jurisdictional Commissionerates of Customs, which will replace Central Excise Commissionerates hitherto performing Customs functions, are notified and become functional, the jurisdictional Central Excise Commissionerates shall continue to discharge Customs functions as required under the Drawback Rules Suitable Public Notices for information of the Trade and Standing Orders for guidance of the staff may be issued. 7. Problems or difficulty which may be encountered in implementing the Brand Rate fixation work may please be brought to the notice of Board. Yours faithfully, (Nitish K. Sinha) Joint Secretary to the Government of India

6 Circular No. 24/2017 -Customs To, F. No. 609/46/2017-DBK Government of India Ministry of Finance, Department of Revenue Central Board of Excise & Customs ***** New Delhi, dated 30 th June, 2017 Principal Chief Commissioners / Principal Directors General, Chief Commissioners / Directors General, Principal Commissioners / Commissioners, all under CBEC Madam/Sir, Subject: Duty Drawback for supplies made by DTA units to Special Economic Zones in the GST scenario Attention is invited to Board s Circular No. 43/2007-Customs dated and Circular No. 39/2010-Customs dated which inter alia prescribe that in respect of drawback claims by a DTA supplier for supplies made to SEZ Unit or developer, when accompanied by a disclaimer, the drawback shall be disbursed by the Central Excise Commissionerate having jurisdiction over the manufacturing unit of the DTA supplier. 2. In view of implementation of GST, Board has decided to re-organise the Customs functions hitherto handled by Central Excise formations. In this context, it has been decided that in respect of supplies made by DTA unit to SEZ Unit or developer and where the SEZ Unit or developer issues a disclaimer to the DTA supplier and drawback is claimed by the DTA supplier, the drawback shall be processed and paid by the office of Principal Commissioner or Commissioner of Customs/ Customs (Preventive) in whose jurisdiction the DTA Unit falls. Further, the fixation of Brand rate in case of supplies from DTA to SEZ Unit or developer, if required, shall also be done by the office of said Principal Commissioner/ Commissioner. This shall apply to all fresh applications/ claims filed from onwards. 3. The applications/ claims which have already been filed up to and are pending with jurisdictional Central Excise formations shall be transferred to the Principal Commissioner/ Commissioner of Customs/ Customs (Preventive) having jurisdiction over the DTA supplier. For smooth transition of above cited work to Customs formations, it is essential that transfer of documents is undertaken carefully and in close coordination with Customs authorities concerned without disruption, delay etc. 4. The extant instructions regarding processing etc. of drawback claims of DTA suppliers for supplies made to SEZ Unit or developer remain unchanged except to the extent stated above. It may be noted that Central Excise officers have been designated as officers of Customs under the Customs Act, Accordingly, till the time jurisdictional Commissionerates of Customs, which will replace Central Excise Commissionerates hitherto performing Customs functions, are notified and become functional, the jurisdictional Central Excise Commissionerates shall continue to discharge Customs functions as required under the Drawback Rules, Suitable Public Notice for information of the trade and Standing Order for guidance of the staff may kindly be issued. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. Yours faithfully, (Nitish K. Sinha) Joint Secretary to the Government of India

7 F. No. 450/28/2016-Cus.IV Government of India Ministry of Finance Department of Revenue (Central Board of Excise and Customs) Circular No. 25/2017-Customs To New Delhi, dated the 30th June, 2017 AJJ Principal Chief Commissioner/Chief Commissioner of Customs & Central Excise All Principal Commissioner/Commissioner of Customs & Central Excise All Principal Chief Commissioner/Chief Commissioner of Customs/Customs (Preventive) All Principal Commissioner/Commissioner of Customs / Customs (Preventive) Subject: Customs (Import of Goods at Concessional Rate of Duty) Rules, Implementation thereof-reg. Sir/ Madam, In budget , government had notified Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rules, These rules applied to an importer, being a manufacturer, who intended to avail the benefit of an exemption notification issued under sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and where the benefit of such exemption was dependent upon the use of imported goods covered by that notification for the manufacture of any excisable commodity. These rules were also applied mutatis mutandis in respect of imported goods which were to be used to provide a service instead of being used in the further manufacturing process. 2. With the advent of Goods and Services Tax, Central Excise duty would not be applicable except on a few commodities like Petroleum products, Tobacco products etc. In view of this Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2016 are being superseded with Customs (Import of Goods at Concessional Rate of Duty) Rules, The rules would come in to force from [Notification No. 68/2017-Cus (N.T.) dated refers]. 3. As far as the implementation of the new rules is concerned, it has been provided that the tasks performed by the Central Excise officers under earlier rules would be performed by Customs officers under the new rules. In this connection various proposals have been

8 received from the field formations regarding transferring Customs functions discharged by Excise officers to Customs officers. These proposals are under the consideration of the Board. Till such time Board issues notifications modifying the jurisdiction of Commissionerates of Customs which will take over the Customs work performed in Central Excise Commissionerates, the functions bestowed upon the Deputy Commissioner of Customs or Assistant Commissioner of Customs having jurisdiction over the premises in the new rules, shall be continued to be performed by the officers of the jurisdictional Central Excise Commissionerates like before. Since the necessary legal empowerment of Central Excise officials as officers of Customs under the Customs Act, 1962 is already in place, therefore, there should not be any difficulty in complying with the new rules. 4. Difficulties, if any, in this regard may be brought to the knowledge of the Board. 5. Hindi version will follow. Yours faithfully (Zubair Riaz) Director (Customs) Tel:

9 Circular No. 26/2017-Customs F. No. 450/08/2015-Cus.IV Government of India Ministry of Finance Department of Revenue (Central Board of Excise and Customs) New Delhi dated the 1st July, 2017 To All Principal Chief Commissioner/Chief Commissioner of Customs & Central Excise All Principal Commissioner/Commissioner of Customs & Central Excise All Principal Chief Commissioner/Chief Commissioner of Customs/Customs (Preventive) All Principal Commissioner/Commissioner of Customs / Customs (Preventive) Sir/ Madam, Subject: Export procedure and sealing of containerized cargo-regarding. Goods and Service Tax has become operational from In the GST regime, the governing provisions related to exports are contained in section 16 of the Integrated Goods and Service Tax Act, 2017 (IGST Act). Supplies of goods and services for exports have been categorized as 'Zero Rated Supply' implying that goods could be exported under bond or Letter of Undertaking without payment of integrated tax followed by claim of refund of unutilized input tax credit or on payment of integrated tax with provision for refund of the tax paid. 2. With the onset of GST, extant procedures relating to export of goods viz. claim of rebate/refund, stuffing of containers at the factory, warehouse or any other place from where the goods are intended to be exported etc. would require review of the existing procedures. In this regard, attention is drawn to notification No's 42/2001-CE (N.T.) to 45/2001-CE (N.T.) both dated detailing the procedure to be followed for the export of goods on payment of terminal excise duty and 19/2004-CE (N.T.) and 20/2004-CE (N.T.), both dated , without payment thereof. A. Procedure of Export 3. Any person making zero rated supply (i.e. any exporter) shall be eligible to claim refund under either of the following options, namely: -

10 (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilized input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 (Refunds) of the Central Goods and Services Tax Act or the rules made there under (i.e. the Central Goods and Service Tax Rules, 2017). 4. For the option (a) above, procedure to file refund has been outlined in the Central Goods and Service Tax Rules, The exporter claiming refund of unutilized input tax credit will file an application electronically through the Common Portal, either directly or through a Facilitation Centre notified by the GST Commissioner. The application shall be accompanied by documents as prescribed in the said rules. Application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods. The formats for furnishing bond or LUT for export of goods have been separately notified under COST Rules, The said formats are attached herewith for easy reference. 5. For the option (b), broadly the procedure is that a registered person shall not be required to file any application for refund of integrated goods and services tax paid on supply of goods for exports. The shipping bill, having inter-alia GST invoice details, filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and the applicant has furnished a valid return in FORM GSTR-3. The details of the relevant export invoices contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the Customs system and the said system shall in turn electronically transmit back to the common portal a confirmation that the goods covered by the said invoices have been exported out of India. Upon receipt of information regarding furnishing of valid return in FORM GSTR-3 from the common portal, the Customs system shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars. Government has allowed a grace period to the registrants to file returns under the new GST Law. Therefore, this refund procedure shall as a consequence come into operation only when the registrants file the above mentioned returns. Further, the exporters are free to avail option (a) or option (b). The refund shall be governed by the provisions of the section 16 of the IGST Act. ~ 2-

11 6. In order to ensure smooth transition from the earlier export procedure to the procedure being laid down for export of goods under the GST regime, the existing Shipping Bill formats (both manual/ electronic) have been modified to make them compliant with the IGST law. New formats of the Shipping Bill have been made applicable already. ARE-1 procedure which was being followed is dispensed with except in respect of commodities to which provisions of Central Excise Act would continue to be applicable. B. Sealing of Containers 7. Board has in the past issued various circulars both on the Excise and Customs side on the issue of sealing of containers. A gist of these Circulars and the subject matter dealt in them is given in the annexure to this circular. At present, there are three categories of containers which arrive at the port/icd: a. Containers stuffed at factory premises or warehouse under self-sealing procedure. b. Containers stuffed / sealed at factory premises or warehouse under supervision of central excise officer. c. Containers stuffed and sealed at Container Freight Stations/ Inland Container Depot. 8. For the sake of uniformity and ease of doing business, Board has decided to simplify the procedure relating to factory stuffing hitherto carried out under the supervision of the Central Excise officers. It is the endeavor of the Board to create a trust based environment where compliance in accordance with the extant laws is ensured by strengthening Risk Management System and Intelligence setup of the department. Accordingly, Board has decided to lay down a simplified procedure for stuffing and sealing of export goods in containers. 9. It has been decided to do away with the sealing of containers with export goods by CBEC officials. Instead, self-sealing procedure shall be followed subject to the following: The exporter shall be under an obligation to inform the details of the premises whether a factory or warehouse or any other place where container stuffing is to be carried out, to the jurisdictional customs officer. The exporter should be registered under the GST and should be filing GSTRI and GSTR2. Where exporter is not a GST registrant, he shall bring the export goods to a Container Freight Station/Inland Container Depot for stuffing and sealing of container. However, in certain situations, an exporter may follow the self-sealing procedure even if he is not required to be

12 registered under GST Laws. Such an exception is available to the Status Holders recognized by DGFT under a valid status holder certificate issued in this regard Any exporter desirous of availing this procedure shall inform the jurisdictional Custom Officer of the rank of Superintendent or Appraiser of Customs, at least 15 days before the first planned movement of a consignment from his/her factory/ premises, about the intention to follow self- sealing procedure to export goods from the factory premises or warehouse. The jurisdictional Superintendent or an Appraiser or an Inspector of Customs shall visit the premises from where the export goods will be stuffed & sealed for export. The jurisdictional Superintendent or Inspector of Customs shall inspect the premises with regard to viability of stuffing of container in the premises and submit a report to the jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs within 48 hours. The jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs shall forward the proposal, in this regard to the Principal Commissioner/Commissioner of Customs who would grant permission for selfsealing at the approved premises. Once the permission is granted, the exporter shall furnish only intimation to the jurisdictional Superintendent or Customs each time self-sealing is carried out at approved premises. The intimation, in this regard shall clearly mention the place and address of the approved premises, description of export goods and whether or not any incentive is being claimed. IV. Where the visit report of the Superintendent or an Appraiser or an Inspector of Customs regarding viability of the stuffing at the factory/ premises is not favorable, the exporter shall bring the goods to the Container Freight Station /Inland Container Depot/Port for sealing purposes. Self-Sealing permission once given by a Principal Commissioner/Commissioner of Customs shall be valid for export at all the customs stations. The customs formation granting the selfsealing permission shall circulate the permission along with GSTIN of the exporter to all Custom Houses/Station concerned. VI. Transport document for movement of self-sealed container by an exporter from factory or warehouse shall be same as the transport document prescribed under the GST Laws. In the case of an exporter who is not a GST registrant, way bill or transport challan or lorry receipt shall be the transport document. VII. The exporter shall seal the container with the tamper proof electronic-seal of standard specification. The electronic seal should have a unique number which should be declared in the Shipping Bill. Before sealing the container, the exporter shall feed the data such as name of the exporter, IEC code, GSTIN number, description of the goods, tax invoice number, -q-

13 name of the authorized signatory (for affixing the e-seal) and Shipping Bill number in the electronic seal. Thereafter, container shall be sealed with the same electronic seal before leaving the premises. viii. ix. The exporter intending to clear export goods on self-clearance (without employing a Customs Broker) shall file the Shipping Bill under digital signature. All consignments in self-sealed containers shall be subject to risk based criteria and intelligence, if any, for examination / inspection at the port of export. At the port/icd as the case may be, the customs officer would verify the integrity of the electronic seals to check for tampering if any enroute. The Risk Management System (RMS) is being suitably revamped to improvise the interdiction/ examination norms. However, random or intelligence based selection of such containers for examination/scanning would continue. 10. Board has decided that the above revised procedure regarding sealing of containers shall be effective from A future date has been prescribed since the returns under GST have been permitted to be filed by and also with the purpose to give enough time to the stakeholders to adapt to the new procedures. Therefore, as a measure of facilitation, the existing practice of sealing the container with a bottle seal under Central Excise supervision or otherwise would continue. The extant circulars shall stand modified on to the extent the earlier procedure is contrary to the revised instructions given in this circular. 11. Suitable public Notices may be issued in this regard. Difficulty faced, if any, may be brought to the notice of the Board. 12. Hindi version will follow. Yours faithfully, /t Kje, (Zubair Riaz) Director (Customs)

14 Annexure sr. No Reference Number Date Subject 1 952/1 3/2011-CX Stuffing of export containers - Procedure 892/1 2/2009-CX Exports - Self-sealing/certification facility extended for export ofnonxcisable agricultural products 860/1 8/20,07-CX Exports under Free Shipping Bills - Mandatory self-sealing of containers 741/57/2003-CX Exports to Nepal and Bhutan - Self-sealing and self-certification facility not applicable 736/52/2003-CX Exports - Self-certification and self-sealing facility extended to all categories of Manufacturer-Exporters-Extension of facility of selfsealing to all categories of manufacturer exporters. 481/47/99-CX Containers Sealing of packages/containers procedure Relaxed-modifies 426/59/98-CX in so far as furnishing tentative date and time of export plan by manufacturer exporter is concerned. 445/11/99-CX Exports Special facility of self-certification and self-sealing to large manufacturer Exporter Further instructions. Para 7 (duty of customs officers at the place of export) of 426/59/98-CX is deleted in view of Circular 6/2002-Cus. [90/98-cus. was rescinded vide 31/2002-cus]. 426/59/98-CX Introduction of facility of self-sealing to manufacturers who have paid Central Excise duty exceeding Rs. 10 crores in the preceding financial year in cash or by debit in current account or manufacturer-exporters who have been accorded the status of Super Star Trading House, Star Trading House, Trading House or Export House under the provisions of the Export - Import Policy announced by the Government from time to time. 6/2002-Cus Export- procedure, as also norms for examination of self-sealed containers at the port of export /99-Cus Export Simplification in procedure for movement of export goods on the basis of. Self-certification and reduced percentage of physical examination-dispensing off with routine examination at gateway ports.

15 l.gstin 2. Name FORM GST RFD-11 Furnishing of bond or Letter of Undertaking for export of goods or services 3. Indicate the type of document furnished Bond: [~ Letter of Undertaking [~ 1 4. Details of bond furnished Sr. No. Reference no. of the bank guarantee Date Amount Name of bank and branch Note - Hard copy of the bank guarantee and bond shall be furnished to the jurisdictional officer. 5. Declaration - (i) (ii) (iii) The above-mentioned bank guarantee is submitted to secure the integrated tax payable on export of goods or services, I undertake to renew the bank guarantee well before its expiry. In case I/We fail to do so the department will be at liberty to get the payment from the bank against the bank guarantee, The department will be at liberty to invoke the bank guarantee provided by us to cover the amount of integrated tax payable in respect of export of goods or services. Signature of Authorized Signatory Name Designation / Status Date

16 Bond for export of goods or services without payment of integrated tax (See rule 96) I/We of. hereinafter called "obligor(s)", am/are held and firmly bound to the President of India (hereinafter called "the President") in the sum of. rupees to be paid to the President for which payment will and truly to be made. I/We jointly and severally bind myself/ourselves and my/our respective heirs/ executors/ administrators/ legal representatives/successors and assigns by these presents; Dated this day of. ; WHEREAS the above bounden obligor has been permitted from time to time to supply goods or services for export out of India without payment of integrated tax; and whereas the obligor desires to export goods or services in accordance with the provisions of clause (a) of sub-section (3) of section 16; AND WHEREAS the Commissioner has required the obligor to furnish bank guarantee for an amount of. rupees endorsed in favour of the President and whereas the obligor has furnished such guarantee by depositing with the Commissioner the bank guarantee as afore mentioned; The condition of this bond is that the obligor and his representative observe all the provisions of the Act in respect of export of goods or services, and rules made thereunder; AND if the relevant and specific goods or services are duly exported; AND if all dues of Integrated tax and all other lawful charges, are duly paid to the Government along with interest, if any, within fifteen days of the date of demand thereof being made in writing by the said officer, this obligation shall be void; OTHERWISE and on breach or failure in the performance of any part of this condition, the same shall be in full force and virtue: AND the President shall, at his option, be competent to make good all the loss and damages, from the amount of bank guarantee or by endorsing his rights under the above-written bond or both; I/We further declare that this bond is given under the orders of the Government for the performance of an act in which the public are interested; IN THE WITNESS THEREOF these presents have been signed the day hereinbefore written by the obligor(s).

17 Signature(s) of obligor(s). Date: Place : Witnesses (1) Name and Address (2) Name and Address Occupation Occupation (year) Accepted by me this..day of (month). of (Designation) for and on behalf of the President of India.".

18 Letter of Undertaking for export of goods or services without payment of integrated tax To (See rule 96) The President of India (hereinafter called the "President"), acting through the proper officer I/We of. (address of the registered person) having Goods & Services Tax Identification Number No, hereinafter called "the undertaker(s) including my/our respective heirs, executors/ administrators, legal representatives/successors and assigns by these presents, hereby jointly and severally undertake on this day of to the President (a) to export the goods or services supplied without payment of integrated tax within time specified in sub-rule (9) of rule 96 ; (b) to observes all the provisions of the Goods and Services Tax Act and rules made thereunder, in respect of export of goods or services; (c) pay the integrated tax, thereon in the event of failure to export the goods or services, along with an amount equal to eighteen percent interest per annum on the amount of tax not paid, from the date of invoice till the date of payment. I/We declare that this undertaking is given under the orders of the proper officer for the performance of enacts in which the public are interested. IN THE WITNESS THEREOF these presents have been signed the day hereinbefore written by the undertaker(s) Signature(s) of undertaker(s). Date : Place : Witnesses (1) Name and Address (2) Name and Address Date Place Occupation Occupation (year) Accepted by me this..day of (month).

19 of (Designation) for and on behalf of the President of India

20 I. Introduction: Indian Customs gears up for GST roll-out Guidance Note for Importers and Exporters The purpose of this guidance note is to bring clarity about the impact of GST,which would come into force with effect from , for importers and exporters. On the imports side there would be no impact on levy of Basic Customs duty, Education Cess, Anti-dumping duty, Safeguard duty and the like. However, the Additional duties of Customs, which are in common parlance referred to as Countervailing Duty (CVD) and Special Additional duty of Customs (SAD), would be replaced with the levy of Integrated Goods and Services Tax(IGST), barring a few exceptions.on the exports side, export would be treated as zero-rated supply. Under zero-rated supply IGST paid on export goods or the input tax credit proportionate to the goods and services consumed in goods exported under bond /LUT would be refunded. A brief summary of the changes that would impact importers and exporters upon roll out of GST are encapsulated below: Imports under GST II. Duties at the time of import: In the GST regime, IGST and GST Compensation cess will be levied on imports by virtue of subsections (7) &(9) of Section 3 of the Customs Tariff Act, Barring a few commodities such as pan masala, certain petroleum products which attractlevy of CVD, majority of importswould attract levy of IGST. Further, a few products such as aerated waters, tobacco products, motor vehicles etc, would also attract levy of GST Compensation Cess, over and above IGST. IGST andgst Compensation cess, wherever applicable, would be levied on cargo that would arrive on or after 1 st July, It may also be noted that IGST would also be levied on cargo which has arrived prior to 1 st July but a bill of entry is filed on or after 1 st July 2017.Similarly ex-bond bill of entry filed on or after 1 st July 2017 would attract IGSTand GST Compensation cess, as applicable.in the case where cargo arrival is after 1 st July and an advance bill of entry was filed before 1 st July along with the payment of duty, the bill of entry may be recalled and reassessed by the proper officer for levy of IGST and GST compensation Cess, as applicable. III. Duty Calculation: IGST rate: IGST rates have been notified through notification 01/2017-Integrated Tax (Rate), dated IGST rate on any product can be ascertained by selecting the correct Sl. No. as

21 per description of goods andtariff headings in the relevant schedules of the notification. Importers are advised to familiarize themselves with IGST and GST compensation cess rates, schedule and exemptions which are available on CBEC website. The Customs duty calculator would be made available on CBEC and ICEGATE website.there are seven rates prescribed for IGST- Nil, 0.25%, 3% 5%, 12%, 18% and 28%. The actual rate applicable to an item would depend on its classification and would be specified in Schedules notified under section 5 of the IGST Act, The rates applicable to goods of Chapter 98 are as under: Project Imports- 18% Laboratory Chemicals- 18% Passenger baggage Nil Rate Specified Drugs and medicines for personal use- 5% Other drugs and medicines for personal use- 12% All other dutiable goods for personal use- 28% Likewise, different rates of tax have been notified for goods attracting Compensation Cess which is leviable on 55 item descriptions (of supply). These rates are mostly ad valorem. But some also attract either specific rates (e.g. coal) or mixed rates (ad valorem + specific) as for cigarettes. The coverage of the goods under GST compensation cess isavailable on CBEC website along with their HSN codes and applicable cess rates.the IGST Rates of Goods, Chapter wise IGST rate, GST Compensation Cess rates, IGST Exemption/Concession are available on CBEC website for trade and departmental officers as well. Valuation and method of calculation: IGST is leviable on the value of imported goods and for calculating integrated tax on any imported article, the value of such imported goods would be the aggregate of - (i) (ii) the value of imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 or the tariff value fixed under sub-section (2) of the that section and any duty of Customs chargeable on that article under section 12 of the Customs Act, 1962 and any sum chargeable on that article under any law for the time being in force as an addition to, or as duty of Customs but does not include to the tax referred in the sub-section 7 (IGST) and sub-section 9 (Compensation Cess). The value of the imported article for the purpose of levying GST Compensation cess shall be, assessable value plus Basic Customs Duty levied under the Act, and any sum chargeable on

22 the goods under any law for the time being in force, as an addition to, and in the same manner as, a duty of customs. These would include education cess or higher education cess as well as anti-dumping and safeguard duties.the inclusion of anti-dumping duties and safeguard duty in the value for levy of IGST and Compensation Cess is an important change. These were not hitherto included in the value for the levy of additional duty of customs (CVD) or Special Additional Duty (SAD).The IGST paid shall not be added to the value for the purpose of calculating Compensation Cess. Although BCD, Education Cesses and IGST would be applicable in majority of cases, however, for some products CVD, SAD or GST Compensation cess may also be applicable. For different scenarios the duty calculation process has been illustrated in Annexure - I of this document. IV. Changes in import procedures: Importer Exporter Code (IEC): In GST regime, GSTIN would be used for credit flow of IGST paid on import of goods. Therefore, GSTIN would be the key identifier. DGFT in its Trade Notice No. 09 dated has statedthat PANwould be theimport Export code (IEC). However, while PAN is identifier at the entity level, GSTIN would be used as identifier at the transaction level for every import and export. Further, in scenarios where GSTIN is not applicable, UIN or PAN would be accepted as IEC. It is advised that all importers need to quote GSTIN in their Bills of Entry in addition to IEC. In due course of time IEC would be replaced by PAN / GSTIN. Bill of EntryRegulations andformat: To capture additional details in the Bill of entry such as GSTIN, IGST rate and amount, GST Compensation Cess and amount, the electronic as well as manual formats of Bill of entry including Courier Bill of entry are being amended. For the benefit of the trade, modified Forms have been hosted on the departmental website, Further, suitable notifications shall be issued to amend the relevant regulations and introduce modified Forms. V. Import under Export Promotion Schemesand duty payment throughexim scrips: Under the GST regime, Customs duties will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA. IGST and Compensation Cess will have to be paid on such imports. The EXIMscrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs dutiesor additional duties of Customs, on items not covered by GST,at the time of import. The scrips cannot be utilized for payment

23 ofintegrated Tax and Compensation Cess. Similarly, scripscannot be used for payment of CGST, SGST or IGST for domestic procurements. VI. EOUs and SEZ: EOUs/EHTPs/STPs will be allowed to import goods without payment of basic customs duty (BCD) as well additional duties leviable under Section 3 (1) and 3(5) of the Customs Tariff Act. GST would be leviable on the import of input goods or services or both used in the manufacture by EOUs which can be taken as input tax credit (ITC). This ITC can be utilized for payment of GST taxes payable on the goods cleared in the DTA or refund of unutilized ITC can be claimed under Section 54(3) of CGST Act. In the GST regime, clearance of goods in DTA will attract GST besides payment of amount equal to BCD exemption availed on inputs used in such finished goods. DTA clearances of goods, which are not under GST,would attract Central Excise duties as before. VII. Imports / Procurement by SEZs Authorised operations in connection with SEZs shall be exempted from payment of IGST. Hence, there is no change in operation of the SEZ scheme. VIII. Project Import: Currently for items imported under project import scheme (i.e. CTH 9801), unique heading under the Central Excise Tariff, for the purposes of levy of CVD does not exist. Therefore, under the Central Excise Tariff, each item is getting classified in a heading as per its description and duty is paid on merit. In the GST regime, for the purpose of levying IGST all the imports under the project import scheme will be classified under heading 9801 and duty shall be 18%. IX. Baggage: Full exemption from IGST has been provided on passenger baggage. However, basic customs duty shall be leviable at the rate of 35% and education cess as applicable on the value which is in excess of the duty free allowancesprovided under the Baggage Rules, X. Refunds of SAD paid on imports: The need for SAD refunds arose mainly on account of the fact that traders or dealers of imported goods were unable to take credit of this duty (which was a Central tax) while discharging their VAT or Sales tax liability (which was State levy) on subsequent sale of the goods. Unless

24 corrected through a mechanism such as refund (of one of the taxes) this would have resulted in double payment of tax. With the introduction of GST on , credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, is permissible to registered persons not liable to be registered under the existing law (for instance, VAT dealers) under transitional provisions (Section 140(3) of the CGST Act). Further, eligible duties as defined in sub-section (10) include SAD. In other words, dealers/ traders can take ITC of SAD paid on goods imported prior to 1 st July Sub-section (5) of section 140 also allows a registered person to take credit of eligible duties in respect of inputs received on or after 1 July 2017 but the duty on which has been paid under the existing law. These provisions taken together ensure that SAD paid by dealers/ traders can be set-off against their GST liability as and when imported goods are supplied by them in the domestic market.however, certain items which are out of the GST net would be eligible for SAD refunds as earlier. XI. Imports and Input Tax Credit (ITC): In GST regime, input tax credit of the integrated tax (IGST) and GST Compensation Cess shall be available to the importer and later to the recipients in the supply chain, however the credit of basic customs duty (BCD) would not be available. In order to avail ITC of IGST and GST Compensation Cess, an importer has to mandatorily declare GST Registration number (GSTIN) in the Bill of Entry. Provisional IDs issued by GSTN can be declared during the transition period. However, importers are advised to complete their registration process for GSTIN as ITC of IGST would be available based on GSTIN declared in the Bill of Entry. Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in the Invoice Rules are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person. Customs EDI system would be interconnected with GSTN for validation of ITC. Further, Bill of Entry data in non-edi locations would be digitized and used for validation of input tax credit provided by GSTN. Exports under GST XII. Drawback: