Duty liability on DTA clearances/sales - CBEC's Customs Manual 2023 - Customs

17. Duty liability on DTA clearances/sales: 17.1 In terms of proviso to Section 3(1) of the Central Excise Act, 1944, duty payable on goods falling under Fourth schedule to the Central Excise Act 1944 cleared in DTA is equal to the aggregate of the Customs duties which would be leviable under the Customs Act, 1962 or under any other law for the time being in force, on like goods produced or manufactured outside India, if imported into India. The value for payment of duty (after granting applicable depreciation on capital goods) is arrived at in accordance with the provisions of the Customs Act, as if these are imported goods. In case of clearance of goods under GST, DTA sale will be on payment of applicable GST alongwith reversal of Basic Customs Duty foregone on inputs used in finished goods (including by-products, rejects, waste and scraps arising in the course of production, manufacture, processing or packaging of such goods) and applicable cesses. An amount equal to anti dumping duty foregone on the goods at the time of import shall also be paid on the equivalent quantity of goods used for manufacture of any goods which are cleared into DTA or on such quantity of goods which are cleared as such into DTA. 17.2 On fulfillment of positive NFE, the EOUs other than Gem and Jewellery units can sell goods including rejects, waste, scrap, remnants, by-products and services in DTA. However, Gem and Jewellery units may sell upto 10% of FOB value of export of the preceding year in DTA, subject to fulfillment of positive NFE. The words FOB value of exports refers to physical exports only. Therefore, the value of deemed exports made by the unit is not considered while determining the FOB value of exports. [Instruction vide F.No. 305/48/2000-FTT dated 07.04.2000] 17.3 Sales made to a unit in SEZ is also taken into account for purpose of arriving at FOB value of export by EOU provided payment for such sales are made from Foreign Exchange Account of SEZ unit. Sale to DTA would also be subject to mandatory requirement of registration of pharmaceutical products (including bulk drugs). An amount equal to Anti Dumping duty under section 9A of the Customs Tariff Act, 1975 leviable at the time of import, shall be payable on the goods used for the purpose of manufacture or processing of the goods cleared into DTA from the unit. 17.4 For services, including software units, sale in DTA in any mode, including on line data communication, is also permissible up to 50% of FOB value of exports and/ or 50% of foreign exchange earned, where payment of such services is received in foreign exchange. However, sale in DTA in respect of services classified under Chapter Heading 9988 and 9989 under GST, but covered in LOP/para 9.31 of FTP as manufacturing of goods, will continue to be covered under para 6.08(a) of FTP. At the time of DTA clearance, applicable GST and compensation cess as per GST classification would apply. [Refer Notification No. 10/2015-2020 dated 07.06.2018 of DGFT] 17.5 In case of new EOUs, advance DTA sale are allowed not exceeding 50% of its estimated exports for first year, except pharmaceutical units where this will be based on its estimated exports for first two years. 17.6 Supplies of specified items such as accessories like tags, labels, printed bags, stickers, belts, buttons or hangers produced or manufactured in an EOU are allowed on payment of GST to a unit in DTA for use in the manufacture or processing of goods which are exported and thereupon such supplies shall be counted towards fulfillment of positive NFE of EOU. [Refer Circular No. 12/2008-Cus., dated 24-7-2008] 17.7 The concessional rate of duties for goods falling under Fourth Schedule to the Central Excise Act 1944 sold in DTA by an EOU are prescribed under Notification No. 23/2003 CE, dated 31-3-2003.