You Ask We Answer
Q 420: What is the implication of import duty on imported goods which are lost before clearance?
A: 1. It is an unfortunate situation for the importer when goods imported are lost before clearance.
2. Generally, it does not happen. However, the situation is not uncommon that goods are lost partly or fully before the clearance.
3. Section 23 of The Customs Act, 1962 deals with this situation.
4. This section refers to Remission of duty on lost, destroyed or abandoned goods.
5. Without prejudice to the provisions of Section 13, where it is shown to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost otherwise than as a result of pilferage or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall remit the duty on such goods.
6. The owner of any imported goods may, at any time before an order for clearance of the goods for home consumption under Section 47 or an order for permitting the deposit of goods in a warehouse under Section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon.
7. The importer has to take timely initiative and apply for relinquishing the title to the goods.
8. The owner of such imported goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force.
9. This Section does not cover loss of goods by theft.
10. Section 13 refers to duty on pilfered goods.
11. If any imported goods are pilfered after the unloading thereof and before the proper officer has made an order for clearance for home consumption or deposit in a warehouse, the importer shall not be liable to pay the duty liveable on such goods except where such goods are restored to the importer after pilferage.
12. There are several decided cases available on this situation for further reference of the importer.
13. The financial loss to the importer for value of goods can be independently taken care of by proper insurance.
14. If the INCOTERMS @2020 are on FOB, then the importer is responsible to cover the insurance.
15. If the INCOTERMS @2020 are on CIF or CIP, then the supplier is responsible to cover the insurance.
16. The insurance claim can be filled by either party, which is subject to terms and conditions of the policy and the facts of the individual case.
Q 421: Can we do job work for our overseas client? What are the provisions?
A: 1. Yes.
2. Please refer Customs Circular No. 32/1997 dated: 1.04.1997.
3. The goods are exempted when imported into India from the whole of the duty of Customs leviable thereon which is specified in the first Schedule to the Customs Tariff Act, 1975.
4. And from whole of the additional duty leviable thereon.
5. These exemptions are subject to the following conditions:
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(i) |
That the goods are imported for execution of an export order placed on the importer by the supplier of goods for jobbing. |
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(ii) |
That the goods so imported, including resultant products, are re- exported to the supplier of the goods or to any other person which the said supplier may specify.
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Within 6 months from the date of clearance or within such extended period.
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Where the goods are in the nature of patterns, drawings, jigs, tools, fixtures, molds, tackles and instruments, such goods may be allowed to be retained subject to payment of Customs duties leviable.
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Except for items specified in the negative list of import.
-----------------------------------------------------------------The wastage arising during the process of jobbing, as per SION, shall be disposed of in the specific manner.
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(iii) |
That the goods are utilised only for the discharge of export obligation.
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No part thereof shall be sold, loaned, transferred or otherwise used or disposed of.
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(iv) |
Namely that the FOB value of the resultant products exported is at least 10% more than the CIF value of all goods imported in relation to the said resultant products. |
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(v)
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That the jobbing is undertaken in accordance with the procedure set out in the Customs (IGCR RULES). |
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(vi) |
The imports and exports are undertaken through specific ports only. |
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(vii)
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That the goods being imported are not prohibited.
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6. The importer under job work should update with the latest changes at the time of import and strictly comply with the requirement.