IGCRS Rules: No approval needed to re-export goods imported

Clipped from: https://www.business-standard.com/india-news/chatroom-no-approval-needed-to-re-export-goods-imported-under-igcrs-rules-123050100547_1.html

There is no requirement under FEMA that you must have an IEC before receiving advance payment for exports

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Q. We imported certain goods claiming the benefit of an exemption notification that provided for observance of the procedures prescribed under the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules 2022, i.e. IGCRS Rules. Now, we find the goods defective, and want to re-export them. Do we need permission from our jurisdictional Customs authorities?

No. Rule 12(2) of the IGCRS Rules says that any re-export of unutilised or defective goods referred to in sub-rule (1) shall be recorded by the importer in the monthly statement by providing details of necessary export documents. So, there is no need to take any permission from your jurisdictional Customs authorities.

Q. We received an advance against an export order before we obtained our Importer Exporter Code (IEC) number. Is this a violation of FEMA?

No. There is no requirement under FEMA that you must have an IEC before receiving advance payment for exports.

Q. We want to procure goods from Cambodia, a country that is listed as a least developed country (LDC) in the notification 96/2008-Cus dated August 13, 2008, and as an Asean country in the notification 46/2011-Cus dated June 1, 2011. Are we free to ask for exemption under either of these notifications?

Yes. But please make sure that you go through the related notifications for determination of origin Rules (29/2019-Cus(NT) dated March 10, 2015 for LDCs, and 189/2009-Cus(NT) dated December 31, 2009 for Asean, and get the right Certificate of Origin prescribed in the respective Rules.

Q. We refer to the Chatroom column (Business Standard, April 17, 2023) where you have said that EO fulfillment can start from the date of issue of EPCG authorisation. Does it mean that we can export goods bought out from others and start fulfilling the EO?

No. Para 5.04(a) of the FTP says that export obligation shall be fulfilled by the Authorisation holder through export of goods which are manufactured by him or his supporting manufacturer / services rendered by him, for which the EPCG authorisation has been granted. So, the clarification I had given works in a situation where the EPCG authorisation holder or his supporting manufacturer already has the capacity to manufacture the export product.

Q. I entered into a contract with a builder for construction of a building on my plot and paid some advance on which he charged GST. Due to problems at his end, he is unable to construct the building and so, the contract is cancelled. He has returned the money he took as advance, but says that he cannot return the GST, as he has already paid it to the government. Is there any way I can get the amount of GST paid, and if so, how?

You can file a refund claim with the government in accordance with the procedure prescribed in the CBIC Circular no. 188/20/2022-GST, dated December 27, 2022. For the text of that circular, please see this link: https://taxinformation.cbic.gov.in/view-pdf/1003140/ENG/Circulars.

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