Invoice value mismatch, Customs - Exim - SEZ

[Mednob India]

We had received 4 consignments and routed the same through SEZ. On receipt of the goods we were given the BOE for home consumption (SEZ to DTA Unit) in 2021-2022, we had made the payments to the seller as per the invoice. But the BOE and the entries made by SEZ to the customs seems to be with very high values to a tune of 7% to 41% than the invoice value. Now we are unable to close the BOE as the bank states full invoice amount not paid. Trying to reach the SEZ unit but finding it difficult. Kindly guide what can be done to resolve the issue. Contact [email protected]

Posts / Replies

[YAGAY andSUN]

It seems like you're facing a discrepancy in the Bill of Entry (BOE) values for goods received through the SEZ (Special Economic Zone) route, where the BOE and entries made by SEZ to customs are higher than the invoice value. This is creating an issue for closing the BOE and clearing the outward remittance with your bank.

Here’s a step-by-step guide on how you can approach resolving the issue:

1. Verify the Discrepancy

• Check the BOE Details: Review the BOE details, including the value declared in the SEZ and the invoice value provided by the seller. Confirm the exact discrepancy, for instance, the 7% to 41% higher values.

• Understand the SEZ Procedures: When goods are routed through SEZ, they are often initially imported at a zero duty or special concessionary rates and then moved to DTA (Domestic Tariff Area) with the appropriate customs duties. Check if the higher values reflect adjustments for these movements or any additional duties levied at the time of transfer.

2. Contact the SEZ Unit (Direct or Escalation)

• Reach Out to SEZ Authorities: Since you're finding it difficult to contact the SEZ unit directly, try escalating to higher authorities within the SEZ or reach out to the SEZ Development Commissioner in your region. They usually have a grievance redressal process and can guide you on the next steps.

• Request a Correction or Clarification: Once you get in touch with the SEZ unit, ask them to explain why the values on the BOE are higher than the invoice values. They should be able to explain whether the difference is due to valuation adjustments or additional duty payments.

• Request an Amended BOE: If there is a clear error or discrepancy in the BOE value that doesn't align with the invoice, request an amended BOE with the correct value that reflects the actual transaction value as per the invoice.

3. Review Customs Entry Details

• Check the Customs System: The customs system may have incorrectly recorded the value of the goods transferred from the SEZ to DTA. You should check the Customs records associated with the BOE to identify if any errors were made at the time of filing or processing the customs clearance.

• Seek Customs’ Help: If the issue is found within the customs records, you may need to file for an amendment to correct the value. This can be done by approaching the local Customs Commissionerate that processed your goods.

4. Communicate with the Bank

• Provide Supporting Documentation: Once you have identified the correct values (either from the SEZ unit, corrected BOE, or customs records), provide your bank with updated documentation to reflect the actual invoice values. Include:

  • Corrected BOE (if any amendments are made).

  • Invoice from the seller for the goods.

  • Payment proof to show the payment has been made against the correct invoice value.

• Clarify the Situation: If there’s no formal amendment yet but you have proof of the discrepancy and payment, explain the situation to your bank. Ask them to temporarily allow the remittance to be matched to the invoice value.

5. Resolution with SEZ Authorities and Customs

• File a Discrepancy Complaint: If you’re unable to get the correct information from the SEZ unit or customs, file a formal grievance with the relevant authorities explaining the discrepancy in the BOE values. Provide all supporting documentation to show that the actual transaction value is different.

• Customs Valuation Unit: If the discrepancy involves valuation, you may need to involve the Customs Valuation Unit for a formal assessment.

6. Possible Refunds or Adjustments

• If the discrepancy results in overpayment of duties, you might be eligible for a refund or adjustment based on the actual invoice value.

• The customs authorities may allow you to claim a refund of excess duty paid after verifying the actual invoice value compared to the higher BOE value.

7. Consider Legal Assistance (if necessary)

• If the matter is not getting resolved through standard communication channels, consulting a customs lawyer or a trade compliance consultant could be helpful. They can assist in filing the necessary applications and pursuing any legal recourse if customs or the SEZ unit is not providing a solution.

Key Documents You Will Need:

• Original invoice from the seller with the amount paid.

• Bill of Entry (BOE) showing the higher value.

• Proof of payments made to the seller.

• Communication with the SEZ unit and customs (emails, letters, etc.).

• Supporting documentation showing the discrepancy and attempts made to resolve the issue.

Conclusion:

The most likely solutions will involve:

1. Getting the SEZ unit to provide an amended BOE or clarifying the value discrepancies.

2. Working with customs to resolve the difference between the customs valuation and the actual invoice value.

3. Providing the correct documentation to the bank to enable closure of the BOE and inward remittance.

Persistence and clear communication with both SEZ and customs authorities, as well as your bank, should eventually resolve the issue.

Let me know if you need further assistance or have specific follow-up questions!