BACKGROUND OF INDIRECT TAX LAW INTRODUCTION TO CUSTOMS DUTY TYPE OF CUSTOM DUTIES

Transcription

1 CONTENTS u Chapter-heads I-5 u Section-wise Index I-21 DIVISION ONE LIABILITY OF CUSTOMS DUTY 1 BACKGROUND OF INDIRECT TAX LAW 1.1 Features of Indirect Taxes Constitution of India Bill, Act, Ordinance and Rules Information on website 7 2 INTRODUCTION TO CUSTOMS DUTY 2.1 Brief background of Customs Law Nature of customs duty Territorial waters and customs waters Goods under Customs Act Classification for Customs and rate of customs duty 26 3 TYPE OF CUSTOM DUTIES 3.1 Basic customs duty Additional customs duty u/s 3(1) (CVD) Education cess on customs duty Secondary and Higher Education Cess Additional duty under section 3(3) 42 I-9

2 CONTENTS I Additional duty under section 3(5) (Special CVD - SAD) Protective duties Countervailing duty on subsidised goods Anti-dumping duty on dumped articles Safeguard duty NCCD of Customs Export duty Cess IGST on goods at the time of import 73A 3.15 GST Compensation cess on goods at the time of import 73A 4 CLASSIFICATION OF GOODS 4.1 Central Excise Tariff Act (CETA) and Customs Tariff Act (CTA) Overview of Tariff Rules for Interpretation of Tariff Application of GIR in Tariff Classification in case of conflict between various headings Other provisions relating to classification Classification of parts PRINCIPLES OF CLASSIFICATION 5.1 Trade Parlance Theory HSN and classification Relevance of end use in classification Other principles of classification Ayurvedic, Unani, Homoeopathic medicines 125 DIVISION TWO VALUATION IN CUSTOMS 6 VALUATION FOR CUSTOMS DUTY 6.1 Value for purpose of Customs Act Transaction value at the time and place of importation Rate of Exchange for Customs Valuation 135

3 I-11 CONTENTS 6.4 WTO Valuation Agreement Customs Value - Inclusions Exclusions from Assessable Value Valuation of second hand machinery and old motor cars Declaration of value by importer Customs value as per earlier section 14(1) METHODS OF VALUATION FOR CUSTOMS 7.1 WTO Valuation Agreement Transaction value of same goods for customs valuation Transaction value of identical goods for customs valuation Transaction value of similar goods for customs valuation Deductive value for customs valuation Computed value for customs valuation Residual method for customs valuation VALUATION OF EXPORT GOODS 8.1 Transaction value for assessment Over invoicing/mis-declaration for export Earlier provisions relating to customs value of export goods UNDERVALUATION OF CUSTOMS DUTY 9.1 Transaction value to be normally accepted Cases where charge of undervaluation not held valid Cases where charge of undervaluation held valid Burden of proof of undervaluation in customs Debit of Import Authorisation only with invoice value 215 DIVISION THREE PROCEDURES IN CUSTOMS 10 CUSTOMS PROCEDURES 10.1 Administrative set up of Central Excise and Customs 219

4 CONTENTS I Binding nature of departmental circulars General provisions relating to customs procedures Self-assessment of customs duty Containers and Inland Container Depots Miscellaneous Customs Procedures Coastal goods Special Notified Zone for trading of rough diamonds IMPORT PROCEDURES 11.1 Import procedures by carrier Overview of procedures for import Submission of Bill of Entry Self-assessment of customs duty Provisional assessment Relevant date for rate and valuation of import duty Relevant date for foreign exchange rate Execution of bond Customs clearance from view of import policy Procedure after assessment and checking of authorization Import of software through data communication Demurrage if goods not cleared from customs Storage in public warehouse pending clearance Disposal if goods not cleared within 30 days EXPORT PROCEDURES 12.1 Procedures by person in charge of conveyance Procedure to be followed by exporter Permission to export by customs Other procedures relating to exports BAGGAGE RULES, Background General Free Allowance Rate of customs duty on baggage 318

5 I-13 CONTENTS 13.4 Concession for transfer of residence Other provisions of Baggage CUSTOMS PROCEDURES FOR COURIER AND POST 14.1 Import and export through courier Export and import by post 329 DIVISION FOUR EXEMPTIONS AND DEMANDS IN CUSTOMS 15 EXEMPTION FROM CUSTOMS DUTY 15.1 Tariff rate and effective rate of duty Exemption from duty by a notification Exemption optional Other provisions in respect of exemption Exemption when required certificate obtained later SPECIFIC EXEMPTIONS IN CUSTOMS 16.1 Exemption from Customs Duty Project imports General exemptions under customs notifications Control over end use exemptions INTERPRETATION OF EXEMPTION NOTIFICATION 17.1 Strict construction of exemption notification Purposive interpretation of exemption notification Relevance of end use in exemption notification Relevance of tariff for interpretation of exemption notification Other principles of interpretation 370

6 CONTENTS I REMISSION, RE-IMPORTS AND RE-EXPORTS 18.1 Remission on lost/pilfered goods Remission on relinquished goods Abatement of duty on damaged goods Re-import of goods Refund of customs duty if imported goods are rejected Re-exports DEMANDS OF CUSTOMS DUTY 19.1 Short payment of customs duty Time limit for demand of duty Show cause notice Who can issue show cause notice Requirements of show cause notice Revised show cause notice/corrigendum Authority cannot go beyond show cause notice Serving of show cause notice Reply, Hearing and Order by adjudicating authority Provisional attachment pending adjudication INTEREST FOR DELAYED PAYMENT OF DUTY 20.1 Interest if duty paid late Nature of tax, penalty and interest DEMANDS FOR SUPPRESSION, MISSTATEMENT OR FRAUD 21.1 Extended period for demand Wilful suppression of facts Primary facts must be disclosed, but not the inferences Fraud/Misstatement/Collusion Notice for demand for suppression, fraud Burden of proof is on department 426

7 I-15 CONTENTS 21.7 Voluntary payment in case of show cause notice alleging suppression of facts RECOVERY OF DUES 22.1 Recovery of sums due to Government Detention and sale of property General provisions in respect of recovery 433 DIVISION FIVE OTHER PROVISIONS IN CUSTOMS 23 REFUND OF CUSTOMS DUTY 23.1 Claim of refund when appeal not required Procedure for filing refund application Time limit for filing refund application Refund when benefit could not be availed due to department s mistake Duty collected from buyer must be paid Proof of not passing of burden Interest on late disbursement of refund Consumer Welfare Fund Applicability and validity of doctrine of unjust enrichment Non-application of provisions of unjust enrichment Refund if amount returned to buyer by cheque or credit note or debit note WAREHOUSING IN CUSTOMS 24.1 Need for warehousing in customs Public, Private and special warehouses Warehoused Goods (Removal) Regulations, Warehousing period under customs Manufacture in customs bonded warehouse Clearance from bonded warehouse Other provisions of customs warehousing 507

8 CONTENTS I Goods improperly removed from warehouse Reassessment of customs duty cannot be made at warehouse OTHER PROVISIONS IN CUSTOMS LAW 25.1 Prohibitions on Imports and Exports Customs Broker Suspension or revocation of CB licence Limited liability of Customs Broker (CB) Stores in customs Customs - Other provisions Indirect Taxes Dispute Resolution Scheme Obligation to furnish information on specified authorities 540A 26 PENALTIES AND APPEALS IN CUSTOMS 26.1 Departmental Adjudication Enforcement Powers of Revenue Officers Penalties Confiscation of goods Criminal offences Proof in adjudication and prosecution Appeals 575 DIVISION SIX FOREIGN TRADE POLICY 27 OVERVIEW OF FOREIGN TRADE POLICY Background FT(D&R) Act Foreign Trade Policy Highlights of FTP Amendments to Foreign Trade Policy only by Government, not by DGFT Settlement Commission has jurisdiction in case of default in export obligation and settlement of customs duty and interest 599

9 I-17 CONTENTS 27.7 Administration of Foreign Trade Policy by DGFT Interpretation of DGFT final and binding FT(D&R) ACT AND RULES 28.1 Scheme of FT(D&R) Act Director General of Foreign Trade (DGFT) Penalty and Adjudication under FT(D&R) PROCEDURES UNDER FOREIGN TRADE POLICY 29.1 e-governance of foreign trade Issue of authorisation by DGFT Import/Export Authorisation Authorisation obtained by fraud or misstatement Bond with guarantee for import under authorisation Personal hearing if aggrieved by decision Export Promotion Councils as Registering Authorities POLICY FOR IMPORT AND EXPORT OF GOODS 30.1 Policy for import of goods Broad Policy for import of goods Import/export governed as per policy at the time of import/ export Export Policy Pre-shipment Inspection and quality certification SCOMET Items Free sale and Commerce Certificate Preferential and free trade agreements Settlement of trade disputes and complaints EXPORT PROMOTIONAL MEASURES 31.1 Schemes for encouraging Exports Export Promotional measures through Duty Credit Schemes 660

10 CONTENTS I Export from India Schemes Other promotional measures Status Holders DUTY EXEMPTION/REMISSION SCHEMES 32.1 Duty free import of inputs for export Advance Authorisation Advance authorisation can be issued for exports, deemed exports and intermediate supplies Procurement of indigenous inputs Standard Input Output Norms (SION) Procedure for Issue of Advance Authorisation/DFIA Advance authorisation for annual requirements to exporters Export Obligation against advance authorisation Procedures after advance authorisation DUTY FREE IMPORT AUTHORISATION (DFIA) 33.1 Transferable import authorisation General provisions of DFIA Transferability of DFIA Import under DFIA after fulfilment of export obligation Procedural aspects at DGFT GEM AND JEWELLERY UNITS 34.1 Specialised exports of gem and jewellery Gem and jewellery units in EOU DUTY DRAWBACK 35.1 Drawback of duty on inputs Type of drawback rates Drawback rate fixation Drawback claim procedure 710

11 I-19 CONTENTS 35.5 Drawback - Other provisions Duty drawback on re-export EPCG AUTHORISATION 36.1 Capital goods at concessional rate for export Export Obligation (EO) under EPCG Indigenous Sourcing of Capital Goods and benefits to Domestic Supplier Post Export EPCG Duty Credit Scrip Procedures under EPCG EOU/STP/EHTP/BTU 37.1 An overview of EOU scheme Obtaining approval for setting up EOU/STP/EHTP/BTP Procedures to be followed by EOU/STP/EHTP/BTP Rebate of excise duty and service tax paid on inputs and input services EOU/STP/EHTP/BTP is not a bonded warehouse w.e.f Procedures by EOU Other provisions relating to EOU Exit of EOU Recovery of duty and penal action on EOU TAX PROVISIONS RELATING TO EOU 38.1 EOU and tax laws Central Excise and EOU Nature of Duty paid by EOU Excise Procedures by EOU units OTHER SCHEMES SIMILAR TO EOU 39.1 Software Technology Park (STP) Electronics Hardware Technology Parks Other schemes 807

12 CONTENTS I DEEMED EXPORTS 40.1 Supplies within India qualifying for export benefits Conditions for availing benefits by Indian supplier Procedure for claiming benefit of deemed export SPECIAL ECONOMIC ZONES 41.1 SEZ to encourage exports Special Economic Zones Act and Rules Setting up a new SEZ Benefits to developer Development Commissioner Setting up a unit in SEZ Routine operations in SEZ Sale to SEZ from DTA Sale from SEZ to DTA Tax exemptions to SEZ Miscellaneous provisions FEMA provisions relating to SEZ SEZ policies of State Governments 866 SUBJECT INDEX 869