GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
(CENTRAL BOARD OF EXCISE AND CUSTOMS)
DRAWBACK DIVISION
CIRCULAR NO 45/2016-Customs
New Delhi Dated 23rd September, 2016
To
Pr. Chief Commissioners/Pr. Directors General
Chief Commissioners/Directors General
Pr. Commissioners/Commissioners
(All under CBEC)
Subject: Incorrect simultaneous issuance of dual benefit of Zero duty
EPCG and SHIS to exporters under the FTP 2009-14 - option providing flexibility
to return either benefit.
The undersigned is directed to say that instances of simultaneous issuance of
zero duty EPCG and SHIS were detected by DRI and highlighted to the DGFT.
Subsequently, the CAG of India also mapped the concurrent availing of SHIS and
zero duty EPCG not being in line with FTP 2009-14 provisions. The issue revolves
around wordings in para 5.1A HBP (27.08.2009), para 5.1(f) FTP (5.6.2012), para
5.1(b) FTP (18.4.2013), para 3.10.3 and 9.3 (HBP).
2. After inter-Departmental consultations, that also took into account wordings
in conditions specified in Customs EPCG/Post Export EPCG
notification Nos.
101/2009-Cus,
102/2009-Cus, 22/2013-Cus, 5/2013-Cus, 23/2013-Cus and SHIS
notification No. 104/2009-Cus and clarifications made in Circular Nos.
26/2009-Cus and 38/2010-Cus, the
Public Notice No. 30/2015-2020 dated 8.9.2016
(copy attached) has been issued by the Department of Commerce (DGFT) with the
concurrence of Department of Revenue. The aspects notified in the Public Notice
are self-explanatory. The Ministry directs that pending issues related to the
simultaneous issuance or availing of zero duty EPCG/Post Export EPCG and SHIS
shall be decided in terms of the said Public Notice.
3. It was noted by the Ministry that consequent to issuance of the said Public
Notice, the bar related to dual issuance placed in Customs notifications insofar
as they relate to the FTP 2015-20 become unnecessary. These have been removed
through
Notification No. 52/2016-Customs dated 23.9.2016 that has suitably
amended Notification Nos. 104/2009-Cus, 16/2015-Cus and 17/2015-Cus.
4. The trade and officers should be guided by the Commissioners.
F.No.605/60/2013-DBK
(Dinesh Kumar Gupta)
Director
Encl : As Above
Government of India
Ministry of Commerce & Industry
Department of Commerce
Directorate General of Foreign Trade
Public Notice No. 30/2015-2020
New Delhi dated the 8th September, 2016
Subject: Notification of procedure to be
followed in cases of incorrectly issued simultaneous benefits of Zero
Duty EPCG and SHIS in FTP 2009-14 by the Director General of Foreign
Trade in exercise of powers conferred under Para 2.04 of the Foreign
Trade Policy 2015-2020.
This Directorate had received references from Directorate of Revenue
Intelligence and various exporters, on the subject of incorrectly issued
simultaneous benefits of Status Holder Incentive Scheme (SHIS) and Zero
Duty EPCG Authorization under Foreign Trade Policy 2009-14. The issue
involves Para 5.1(b) of FTP and Para 3.10.3(b) of HBP 2009-14. The
representations have been examined by this Directorate in consultation
with Department of Revenue and it has been decided that exporters who
have been issued or availed such simultaneous benefit of these schemes
shall be allowed flexibility, to the extent specified in this public
notice, to choose one of the two schemes. The option to return either
benefit shall be subject to the following:-
A. Return of SHIS
In case of return of SHIS (including splits), the unutilized SHIS
(part or whole) may be surrendered by the original holder to whom such
SHIS was issued by surrender of the original SHIS scrip.
The amount of SHIS that has been utilized, by the original applicant
to whom SHIS was issued (who has not transferred the SHIS) shall be
refunded In cash (with interest at the rate prescribed under Section
28AA of Customs Act from the date of issue of SHIS by the original
applicant.
The amount of SHIS that has been transferred by original applicant
shall be treated as amount of SHIS utilized and treated accordingly
including for purpose of refund and interest payment by original
applicant.
In cases where SHIS was issued based on exports of immediately
preceding year and then zero duty EPCG was also issued, and the exporter
opts to return the SHIS, the power under Para 2.58 of FTP 2015-20 in
consultation with relevant Committee would be exercised by DGFT to relax
the FTP/HBP provisions requiring the 'prior' return of SHIS.
B. Return of zero duty EPCG/Post Export EPCG
When zero duty EPCG (i.e. all relevant authorizations) has to be
returned, the amount equivalent to the duty forgone shall be refunded in
cash with interest at the rate prescribed -
(a) Rate in EPCG notification if EPCG
returned was correctly availed
(b) Rate Under Section 28AA of Customs
Act if EPCG returned was incorrectly availed) by the exporter.
The unutilized zero duty EPCG (whole or part) may be surrendered.
Further, instead of return of zero duty EPCG (i.e. return of all the
relevant authorizations), the exporter may opt to convert zero duty
EPCGs issued till 17.4.2013 to 3% EPCGs (subject to eligibility) by
paying the differential duties plus applicable interest (at the rate
prescribed under Section 28AA) from date of clearance of the goods till
the date of payment. In such cases, SHIS scrip need not be surrendered.
This option shall not be available when the zero duty EPCG is
already redeemed by DGFT.
When zero duty Post Export EPCG is to be returned, the
authorization(s) shall be surrendered. If any related duty credit
scrip(s) against such Zero duty Post Export EPCG authorization(s) have
been issued the same if unutilized may be surrendered by the original
holder [by surrendering the original duty credit scrips]. The amount of
such Post Export EPCG scrip(s) that has been utilized by the original
applicant shall be refunded in cash (with interest at the rate
prescribed under Section 28 AA of Customs Act from the date of issue of
the PE EPCG). The amount of PE EPCG Scrip(s) that has been transferred
shall be treated as amount of Post Export EPCG scrip(s) utilized and
treated accordingly including for purposes of payment of interest by
exporter.
C. Mode of payment
The amount shall be paid back to Government in cash. The facility of
debiting the amount in valid freely transferable duty credit scrip
issued under Foreign Trade Policy or in valid SHIS scrip held by the
original holder to whom it was issued, shall be allowed for paying the
refund part. However, interest part shall be always paid in cash.
D. Time Frame
A time frame of 9 months from provision of option by DGFT is allowed
to exporters for the above.
E. No penal action in cases of incorrect issuance
On account of different interpretations on the issue in the past, it
has been decided in consultation with DOR that any erroneous issuance of
SHIS/Zero Duty EPCG Authorisation will be considered bonafide error and
no penal action shall be taken against exporters by RAs / field
formations of Custom, including DRI. The Annexure provides the proper
interpretation on the issuance of SHIS and Zero duty EPCG/PE-EPCG
benefits.
F. Consequential Action by CBEC
The CBEC would be issuing a separate Circular for guidance of its
field formations.
Effect of this Public Notice: The exporters who have
incorrectly availed simultaneous benefit of zero percent EPCG and SHIS
have been provided an option to surrender one of the benefits subject to
certain conditions.
(Anup Wadhawan)
Director General of Foreign Trade
[Issued from F.No.
01/61/180/41/AM-13/PC3(Pt.)]
Annexure to Public Notice No. 30 /2015-20 dated
08.09.2016
Different Scenarios of incorrect/simultaneous
issuance of SHIS & Zero duty EPCG benefits
Glossary:
S1 SHIS issued for exports made in year
1
S2 SHIS issued for exports made in year
2
S3 SHIS issued for exports made in year
3
S4 SHIS issued for exports made in year
4
E Zero duty EPCG scheme
availed i.e. issued
N Not taken i.e not issued
*SHIS issued with one year late cutbr />
* * SHIS issued with two year late cut
Different scenarios in different years
on issuance of SHIS, 0% EPCG and 0% Post Export EPCG
|
|
Year
|
SHIS issued
|
0% EPCG issued
|
REMARKS (reference to 0% EPCG includes
0% PE-EPCG import authorization)
|
Year 1
|
2009-10
|
|
|
Not Relevant
|
Year 2
|
2010-11
|
S1
|
E
|
EPCG issued first. Wrong issuance of SHIS. S1 will lapse
forever i.e. S1* and S1** will not be available in future, as E
has been availed.
|
|
|
S1
|
E
|
SHIS issued first. Wrong issuance of EPCG If SHIS benefit
availed was not already surrendered, or refunded with applicable
interest in case utilized.
|
|
|
N
|
E
|
S1 will lapse forever i.e. S1* and S1** will not be available
in future, as E has been availed.
|
|
|
S1
|
N
|
Scrip has been correctly issued
|
|
|
N
|
N
|
Not Relevant
|
Year 3
|
2011-12
|
S1*
|
E
|
EPCG issued first- S1* available if EPCG not availed in
2010-11.
|
|
|
S2
|
E
|
EPCG issued first. Wrong issuance of SHIS. S2 will lapse
forever i.e. S2* and S2** will not be available in future, as E
has been availed.
|
|
|
S1*S2
|
E
|
SHIS issued first. S1* available if EPCG not availed in
2010-11. Wrong issuance of EPCG if S2 availed was not already
surrendered or refunded with applicable interest in case
utilized.
|
|
|
N
|
E
|
S2 will lapse forever i.e. S2* and S3** will not be available
in future, as E has been availed.
|
|
|
S1 *
|
N
|
Scrip has been correctly issued, provided 0% EPCG has not
been availed in 2010-11.
|
|
|
S2
|
N
|
Scrip has been correctly issued
|
|
|
N
|
N
|
Not Relevant
|
Year 4
|
2012-13
|
S1**
|
E
|
EPCG issued first. S1** available if EPCG not availed in
2010-11.
|
|
|
S2*
|
E
|
EPCG issued first. S2* available if EPCG not availed in
2011-12.
|
|
|
S3
|
E
|
EPCG issued first. Wrong insurance of SHIS. S3 will lapse
forever i.e. S3* and S3** will not be available in future, as E
has been availed.
|
|
|
S1**/S2*/S3
|
E
|
SHIS issued first. S1** available if EPCG not availed in
2010-11. S2* available if EPCG not availed in 2011-12. Wrong
issuance of EPCG if S3 availed was not already surrendered or
refund with applicable interest in case utilized.
|
|
|
N
|
E
|
S3 will lapse forever i.e. S3* and S3** will not be available
in future, as E has been availed.
|
|
|
S1**
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2010-11.
|
|
|
S2*
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2011-12.
|
|
|
S3
|
N
|
Scrip has been correctly issued
|
|
|
N
|
N
|
Not Relevant
|
Year 5
|
2013-14
|
S2**
|
E
|
EPCG issued first. S3** available if EPCG not availed in
2011-12.
|
|
|
S3*
|
E
|
EPCG issued first. S3* available if EPCG not availed in
2012-13.
|
|
|
S4
|
E
|
EPCG issued first. Wrong issuance of SHIS. S4 will lapse
forever i.e. S4* and S4** will not be available in future, as E
has been availed.
|
|
|
S2**/S3*/S4
|
E
|
SHIS issued first. S2** availed if EPCG not availed in
2011-12. or S3* available if EPCG not availed in 2012-13. Wrong
issuance of EPCG if S4 availed was not already surrendered or
refunded with applicable interest in case utilized.
|
|
|
N
|
E
|
S4 will lapse forever i.e. S4* and S4** will not be available
in future, as E has been availed.
|
|
|
S2**
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2011-12.
|
|
|
S3*
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2012-13.
|
|
|
S4
|
N
|
Scrip has been correctly issued.
|
|
|
N
|
N
|
Not Relevant
|
Year 6
|
2014-15
|
S3**
|
E
|
EPCG issued first. S3** available if EPCG not availed in
2012-13.
|
|
|
S4*
|
E
|
EPCG issued first. S4* available if EPCG not availed in
2013-14.
|
|
|
S3**/S4*
|
E
|
SHIS issued first. S3** available if EPCG not availed in
2012-13. S4* available If EPCG not availed in 2013-14.
|
|
|
N
|
E
|
Not relevant as the scheme has already sunset on 31 March
2013
|
|
|
S3**
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2012-13.
|
|
|
S4*
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2013-14
|
|
|
N
|
N
|
Not relevant as the SHIS scheme has already sunset on 31
March 2013
|
Year 7
|
2015-16
|
S4**
|
E
|
EPCG issued first. S4** available if EPCG not availed in
2013-14
|
|
|
S4**
|
E
|
SHIS issued first. S4** available if EPCG not availed in
2013-14.
|
|
|
S4**
|
N
|
Scrip has been correctly issued, provided E has not been
availed in 2013-14.
|
|
|
N
|
E
|
Not relevant as the SHIS scheme has already sunset on 31
March 2013.
|
|