Claiming BCD and IGST on FOC Samples, Customs - Exim - SEZ

[Arryie Arryie]

An Individual import FOC samples from a foreign seller, generates orders locally and retun the samples to foreign seller. The individual directly doesn’t involve in trade of the FOC samples received.

While importing FOC samples through, the individual ends up paying IGST and BCD. How the same can be claimed back when returning the samples. The samples are returned in parts for example as illustrated in the matrix below. The samples were received FOC and are to be returned FOC.

 

Q1: Claiming BCD : Which scheme code to put when filing BOE’s and SB’s respectively to claim the BCD. The Icegate has a list of 100+ scheme codes. Any other details on SOP?

Q2 : Claiming IGST : how to go about it

Q3 : which type of SB should be filed for reconciliation?

Import				RETRUN (SB1)	RETURN (SB2)	RETURN (SB3)	RETURN (SB4)		IN HAND AT THE END OF 2ndYEAR
				15-Mar of the next year	15-Jul of the next year	15-Sep of the next year	15-Decof the next year
01-Jan	BOE1	25 Pcs		5 PCS	5 PCS	5 PCS	5 PCS		5 PCS
01-Feb	BOE2	50 PCS		10 PCS	10 PCS	10 PCS	10 PCS		10 PCS
01-Mar	BOE3	10 PCS		5 PCS	5 PCS				0
01-Apr	BOE4	35 PCS			10 PCS	10 PCS	10 PCS		5 PCS
01-May	BOE5	15 PCS			10 PCS				5 PCS
01-Jun	BOE6	35 PCS			10 PCS	10 PCS	10 PCS		5 PCS
TOTAL		170 PCS		20 PCS	50 PCS	35 PCS	35 PCS		30 PCS

The list of 100+ scheme codes as available on ICEGATE

00. Free SB Involving Remittance Of Foreign Exchange

01. Advance License With Actual User Condition

02. Advance License For Intermediate Supplies

03. Advance License

04. Advance Release Order

05. Advance License For Deemed Exports

06. DEPB Post Export

07. DEPB-Pre Export

08. Replenishment Licence

09. Diamond Imprest Licence

10. Bulk License

11. Concessional Duty EPCG Scheme

12. Zero Duty EPCG Scheme

13. CCP

14. Import License For Restricted Items Of Imports

15. Special Import License

16. Export License

17. Advance Licence for annual requirement

18. (Intentionally left blank – No 18 in source text)

19. Drawback

20. Jobbing(JBG)

21. EOU/EPZ/SEZ/EHTP/STP

22. Duty Free Credit Entitlement Certificate

23. Target Plus Scheme

24. Vishesh Krishi Upaj Yojana (VKUY)

25. DFCE for Status holder

26. Duty Free Import Authorization

27. Focus Market Scheme

28. Focus Product Scheme

29. High Tech Products Export Promotion Scheme

30. EPCG Duty Based

31. Status Holder Incentive Scheme

32. Tariff Quota

33. (Intentionally left blank – to maintain numbering)

34. (Intentionally left blank – to maintain numbering)

35. Incremental Incentivisation Scheme

36. Merchandise Export Incentive Scheme

37. Service Export Incentive Scheme

38. (Intentionally left blank – to maintain numbering)

39. Rebate of State and Central Taxes Levies

40. DBK and Advance Licence for annual requirement

41. Drawback And Advance License

42. (Intentionally left blank – to maintain numbering)

43. Drawback And Zero Duty EPCG

44. Drawback And Concessional Duty EPCG

45. Drawback And Pre Export DEPB

46. Drawback And Post Export DEPB

47. Drawback And JBG

48. Drawback And Diamond Imprest Licence

49. Drawback And EOU/EPZ/SEZ

50. EPCG And Advance Licence

51. (Intentionally left blank – to maintain numbering)

52. EPCG and JBG

53. EPCG And Diamond Imprest Licence

54. EPCG And Replenishment Licence

55. EPCG and DEPB(Post Exports)

56. EPCG and Advance Licence for annual requirement

57. (Intentionally left blank – to maintain numbering)

58. (Intentionally left blank – to maintain numbering)

59. EPCG and DFIA

60. Drawback, and ROSCTL

61. EPCG,Drawback and ROSCTL

62. Drawback and special DEEC(4.04A)

63. EPCG,Drawback and special DEEC(4.04A)

64. EPCG,Drawback and special DEEC(4.04A)

65. EPCG,Drawback,special DEEC(4.04A) and ROSCTL

66. (Intentionally left blank – to maintain numbering)

67. (Intentionally left blank – to maintain numbering)

68. (Intentionally left blank – to maintain numbering)

69. (Intentionally left blank – to maintain numbering)

70. (Intentionally left blank – to maintain numbering)

71. EPCG,Drawback And DEEC

72. (Intentionally left blank – to maintain numbering)

73. EPCG,DRAWBACK And Jobbing

74. EPCG Drawback And Diamond Imprest Licence

75. EPCG Drawback And DEPB Post Export

76. Epcg, Drawback And Depb (Pre-export)

77. (Intentionally left blank – to maintain numbering)

78. (Intentionally left blank – to maintain numbering)

79. EPCG,Drawback and DFIA

80. EPCG,Drawback and Advance Licence for annual requirement

81. DFIA and Drawback

82. (Intentionally left blank – to maintain numbering)

83. (Intentionally left blank – to maintain numbering)

84. (Intentionally left blank – to maintain numbering)

85. (Intentionally left blank – to maintain numbering)

86. (Intentionally left blank – to maintain numbering)

87. (Intentionally left blank – to maintain numbering)

88. (Intentionally left blank – to maintain numbering)

89. (Intentionally left blank – to maintain numbering)

90. (Intentionally left blank – to maintain numbering)

91. Merchandise Export Incentive Scheme for eCommerce Shipments

92. (Intentionally left blank – to maintain numbering)

93. (Intentionally left blank – to maintain numbering)

94. (Intentionally left blank – to maintain numbering)

95. (Intentionally left blank – to maintain numbering)

96. (Intentionally left blank – to maintain numbering)

97. (Intentionally left blank – to maintain numbering)

98. Free Shipping Bill involving Indian Currency

99. NFEI (No Foreign Exchange Involved)

100. PI-Project Import / RD-RoDTEP Scheme / RS-RoSCTL Scheme

 

 

Posts / Replies

[YAGAY andSUN]

Understanding the Process for Claiming BCD and IGST on FOC Samples Imported and Returned:

You’ve mentioned importing FOC samples (Free of Cost) and paying IGST (Integrated Goods and Services Tax) and BCD (Basic Customs Duty) on these goods. The samples are to be returned to the foreign seller, and you want to know how to claim back the taxes, including the BCD and IGST, when returning these samples.

Let's break down your queries:

Q1: Claiming BCD on Import of FOC Samples

When importing samples, even though they are free of cost, customs duty is applicable at the time of import (i.e., BCD). To claim back the BCD, you would typically rely on Duty Drawback or any available schemes that allow refunds or exemptions on returned goods.

1. Scheme Code for BCD Claim:
   To claim BCD when returning the goods, you should choose the appropriate scheme code for the Duty Drawback or EPCG (Export Promotion Capital Goods), as these are commonly used when goods are exported (or in your case, returned).

   Based on the ICEGATE scheme list, the likely applicable schemes are:

   • Scheme Code 19 – Drawback: This allows you to claim a refund of duties on goods that are exported or returned.

   • Scheme Code 21 – EOU/EPZ/SEZ/EHTP/STP: If you are operating under any Export Oriented Unit (EOU) or similar status.

   • Scheme Code 99 – NFEI (No Foreign Exchange Involved): This scheme code applies when no foreign exchange is involved in the transaction, which may apply to FOC samples that are not sold for profit.

   Standard Operating Procedure (SOP):

   • Fill the correct scheme code on the Bill of Entry (BOE) and Shipping Bill (SB) while filing for customs clearance.

   • Ensure that you have proof of return or export, such as Airway Bill or Courier/Shipment Tracking, as evidence that the goods were returned to the foreign supplier.

Q2: Claiming IGST on FOC Samples

As per the GST law, IGST is applicable on goods imported into India. Since you’ve paid IGST on the imports, it’s important to understand that you may be able to claim a refund when the goods are returned.

1. IGST Refund Process:
   You can apply for a refund of IGST paid on the imported goods that are returned, under the Refund of IGST on Export of Goods process. Here’s how:

   • Fill the Shipping Bill (SB) with the correct details and mention the return of goods as export.

   • Application for Refund: File a refund application under GST RFD-01. The IGST refund application can be filed once the goods are exported or returned to the foreign seller. If the IGST was incorrectly paid, the refund can be requested through the GST portal.

   • Proof of Return: Similar to BCD, ensure that you have documentation to show that the goods were returned to the foreign seller. This will be essential for the refund process.

Q3: Type of SB to be Filed for Reconciliation

For reconciling the taxes paid on the FOC samples and their return, the Shipping Bill (SB) filed should be based on the goods’ movement and the return process.

1. SB Type: Based on the nature of the return and your transaction, you would need to select an appropriate SB type from the list. Common options could be:

   • SB1 (Exemption Scheme) for returned goods where duties were not initially paid or were exempted.

   • SB2 (Normal Scheme) for goods that are being returned as part of the normal export process.

   • SB3 and SB4 (if applicable) for specific types of returns (if you are handling these under any export promotion schemes).

Matrix Breakdown for Returns

The matrix you provided shows how samples are received and returned in parts, which aligns with a step-by-step process to file BOEs and SBs for claiming refunds on the BCD and IGST.

• Each entry for BOE (Bill of Entry) reflects an import of goods at a certain time.

• As per the matrix, you will have to file returns in parts, matching each Shipping Bill (SB) with the corresponding return of goods.

Summary of Key Steps for Claiming BCD & IGST on Return:

Step	Details
1. Scheme Code for BCD	Use Scheme Code 19 (Drawback) or Scheme Code 21 (EOU/EPZ) for claiming BCD refund.
2. Filing BOE/SB	File Bill of Entry (BOE) for importing, with the applicable scheme code.
3. Claiming IGST Refund	Apply for IGST refund under GST RFD-01 once goods are returned to the foreign seller.
4. Shipping Bills (SB)	Choose correct SB type (SB1, SB2, SB3, SB4) for reconciliation based on the nature of returns.
5. Proof of Return	Attach evidence (shipment tracking, Airway Bill) to substantiate the return of goods to the foreign seller.
6. Complete Documentation	Keep import documentation, Shipping Bills, and proof of return for customs and GST reconciliation.

Important Points to Note:

• Ensure you are correctly using Scheme Codes for BCD claim and IGST refund during the filing process.

• IGST Refund can only be claimed when the goods are exported or returned, and the Shipping Bill must reflect this.

• For any reconciliation of tax paid and goods returned, file the appropriate SB and BOE for each shipment.

If you are unsure, it is always advisable to consult a customs expert or a GST consultant to ensure compliance with the procedures and get assistance in filing these claims correctly.