How to Re Export the Rejected Import Material, Customs - Exim - SEZ

[Pandiyan Perumal]

Dear Experts,

We are OEM Manufacturer, we imported (bought) an accessory of our machine for a new implementation, the item was imported in Sep-2018 but not yet paid against the import invoice. The imported item is not matched for our specification, hence the supplied vendor asking us to return the same item as purchase return.

Please guide us on how to process this transaction and how to close the IDPMS document(import documentation process in RBI)

Posts / Replies

[sarojni singh]

As I see it, the re-export of defective imported goods can be carried out in accordance with Article 74 of the Customs Act of 1962. Documentation prepared for general export, i.e. for this purpose. The invoice, the packing list and forms ARE-1 shall be prepared. The invoice and the ARE-1 form must also state, as specified by the bill of entry no. and date and description / tariff, that the item being approved as rejected was previously imported. The clearance shall be made with respect to the payment of applicable duty as cenvat loan in your cenvat accounts. Following the duty drawback application under section 74, the customs authorities are to be reported at the port of import. 98% of the customs duties charged are permissible as a downside in compliance with Section 74. The alternative is also to re-import the material in question, due to the non-claiming of customs duty drawback previously paid, for the null customs duty payments.

[SANJEEV JADHAV]

In addition to Sarojinis reply, GR waiver from Banker is also required to clear the shipment from Customs.

[YAGAY andSUN]

ARE-1 is no more used in GST regime. Customs Department may ask you the reasons for such return after 16 month. Under Section 74 of the Customs Act you will get slab wise duty drawback. At the time of Re-export cross reference of Bill of Entry must be mentioned on Re-export Invoice and on shipping bill. Since you had not made any payments as yet, therefore in our view no need to get any GR Waiver, request to you bank to adjust it IDPMS through EDPMS.

[JAYANTA BANDYOPADHYAY]

In our case, due to change in design, we want to return imported equipment to supplier and they will not replace it but make refund of purchase price. Does it come under EDF Waiver route, as there is no repair-no re-import. Additionally, both parties are related partty.

Please guide

Rgds

Jayanta bandyopadhyay

17.11.2020

[raghunandhaanan r vi]

Sir

As per Section 74 of Customs Act 1962, re-export of imported goods should have been taken place within two years from the date of import. In this case, it seems beyond 2 years. Hence, Board (CBIC) has power to condone the delay.

98% of duty paid will be refunded as Duty drawback provided the goods are in original packing and not used after importation. However, drawback is allowed only if the customs department able to establish their identity ( Ensure export goods are the same which imported earlier)

If goods taken for use after importation and re-export take place after 18 months, No duty drawback available.

[JAYANTA BANDYOPADHYAY]

Sir

There is a twist. Foreign Exporter on receipt of Indian Importer's rejected item, will not destroy this as per condition sheet of EDF Waiver but proportionately refund certain purchase price. My query-EDF Waiver means that Bank stands guarantee as there will be no foreign inward remittance against this export. Then if we receive the amount, this is not going to be EDF Waiver Case. Again, instead of destruction, they will send that item to other party. Here, can Indian Importer export this item as second hand item -Not sure whether DGFT's IEC includes this item as export produce of our company

Kindly guide

Rgds

Jayanta Bandyopadhyay

20.11.2020

[raghunandhaanan r vi]

Sir,

Understand from your query as under:

Goods imported and payment made to seller. You found the article is not as per your specification. Hence you want to re-export the goods to seller. You will not receive replacement or re-import after re-processing . Payment already made will be repatriated. You want re-export under EDF waiver.

In my view: - EDF waiver will be given only for export of goods on free of cost as per the policy. In your case, it is not free of cost. Payment already made needs to be brought back through banking channel. Hence you have to approach your AD bank and get necessary permission subject to conditions mentioned therein to re-export the goods. If you do so, there wont be any hassle to close EDPMS. This is my views only, senior experts may give more inputs ..,Thanks