The CBIC vide Notification No. 77/2021-Customs (N.T.) dated September 24, 2021 has notified the manner to issue duty credit for goods exported under the Scheme for Rebate of State and Central Taxes and Levies (“the Scheme”).
Inter-alia following are the conditions for issuance of duty credit:
1. that the duty credit is issued
a. against exports of garments and made-ups;
b. in accordance with any rules or regulations issued in relation to duty credit, e-scrip or electronic duty credit ledger
c. against the shipping bill or bill of export, presented on or after the January 01, 2021, and where the order permitting clearance and loading of goods for exportation has been made
d. 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
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 on goods when imported into India
3. that the duty credit allowed under the Scheme against export of goods 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 (“FEMA”)
4. 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
5. that duty credit under the Scheme for exports made to Nepal, Bhutan and Myanmar shall be allowed only upon realization 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.
Cancellation of duty credit. – Where a person contravenes any of the provisions of the Customs 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.
Recovery of amount of duty credit. – 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, on that portion of duty credit allowed in excess, which has been used or transferred.
Recovery of amount of duty credit where export proceeds are not realised. – 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 realized by the exporter in India within the period allowed under the Foreign Exchange Management Act, 1999, the exporter shall, himself or on demand by the proper officer, repay the amount of duty credit, along with interest, within fifteen days of expiry of the said period.
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 realized bears to the total amount of sale proceeds.
The Notification can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-act/notifications/notfns-2021/cs-nt2021/csnt77-2021.pdf