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Customs duty on share certificates imported for sale or dematerialization
Circular No. 60 dated 12th July
2000
I am directed to
refer to the subject mentioned above and to say that a representation has been
received from the Stock Exchange, Mumbai stating that the Customs authorities
are insisting on payment of Customs duty when shares held by NRIs abroad are
re-imported for sale or dematerialization. It has been stated that presently the
NRIs are allowed to invest in India shares and hold them overseas. Earlier,
their shares were exported on specific approval of the RBI, but now this
requirement has been waived. These shares are occasionally sent back to India
for purposes of selling/ dematerialization through Postal route or courier/
valuable cargo. The issue raised by the Stock Exchange, Mumbai is whether
customs duty is payable on importation of such shares.
2. The
matter has been examined. Prima facie, all goods which are exported from India
and subsequently re-imported would be liable to duty and would be subject to all
the conditions and restriction as applicable to goods of the kind and value when
imported, as per section 20 of the Customs Act. However, under notification No.
94/ 96-Customs, dated 16-12-1996, exemption has been provided to certain
categories of goods of Indian origin, when they are re-imported into India. This
is of course, subject to fulfillment of certain conditions as specified in the
said notification.
3. The
basic principle underlining the notification is that as long a no export
benefits were claimed at the time of export on any goods, they can be
re-imported without payment of customs duty; The exemption under the
notification would be available if the goods have not undergone any
processing or alteration abroad. As it is evident that the goods, namely, share
certificates could not have undergone any change or reprocessing after export,
exemption as provided under notification No. 94/ 96-Cus., would be available, if
such goods are re-imported within the stipulated period
4. The
Custom Houses may finalize pending provisional of assessments, if any on
the basis of above instructions. Difficulties faced, if any in the
implementation of the said instructions may be brought to the notice of the
Board at an early, date.
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