The Drawback Division, Central Board of Indirect Taxes & Customs (CBIC) has issued Instruction No. 03/2019-Customs dated 13th August, 2019  to its field formations regarding  Recovery of export benefits given under Incentive and Reward Schemes under Chapter 3 of FTP on re-import of exported goods.

We understand  that the issue of  recovery of export benefits given under incentive and reward schemes under Chapter 3 of Foreign Trade Policy (FTP) on re-import of exported goods has been highlighted by C&AG of India. In its observations, Audit has pointed out that there was no provision in the Customs notification to recover the duty credit given under reward and incentive schemes under Chapter 3 of FTP at the time of re-import of such goods on which such benefit has been availed at the time of export.

The issue was examined  by CBIC  in consultation with Directorate General of Foreign Trade (DGFT) who have  informed that RBI Master Direction on exports and imports issued vide F.No. RBI/2006-2007/313 A.P.(DIR Series) Circular No.37 dated 05 April, 2007 already has a provision regarding refund of incentives taken from DGFT for such re-imports. DGFT has also informed that as per para 3.24 of Handbook of Procedures issued under FTP 2015-20, a procedure for obtaining ‘no-incentive certificate’ from Regional Authority (RA) of DGFT has been prescribed for such cases of re-import.

Thus it is incumbent upon the importer to provide a no incentive certificate from RA of DGFT at the time of re-import of exported goods. Accordingly, it is reiterated that before allowing clearance in cases of re-import of exported goods, a ‘no-incentive certificate’ from the respective RA of DGFT shall be ensured by Customs field formations. Further, field formations may review past cases of re-import of exported goods and take necessary action for recovery of inadmissible duty credit, if any, in coordination with DGFT authorities.

The above instructions  issued by  CBIC to customs  field formations are only  for information of members.

Members who are re-importing for any reason after export  are requested to take note and do the needful accordingly.  Issues,  if any,  may be highlighted to the  council  on ed@chemexcil.gov.in  and deepak.gupta@chemexcil.gov.in .

Thanking you,

Yours faithfully,

S.G BHARADI
EXECUTIVE DIRECTOR