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Destruction of exported goods abroad, Customs - Import - Export - Customs - SEZ

Issue Id: - 114381
Dated: 5-12-2018
By:- CAHemanth Kumar B
Destruction of exported goods abroad

  • Contents

Dear Members,

EOU or DTA having benifit of advance authorisation has exported goods and received foriegn currency. Recipiant has rejected such material and got his payment back in foreign currency. Later, EOU or DTA has destroyed such rejected in foreign country without bringing back into India

In this scenario

1. Whether such EOU/DTA has to reverse benefits of duty free imports?

2. Whether MEIS benefit claimed on such exports need to be reversed?

3. Is there any specific procedure for such destruction?

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Posts / Replies

Showing Replies 1 to 4 of 4 Records

1 Dated: 5-12-2018

In my view, no export benefit is admissible in the situation explained by you.

2 Dated: 6-12-2018

You need to reverse all export benefits as mentioned in Chapter 3, 4, 5, 7 of the FTP along with interest as mentioned in the FT(DR) Act.

Further, you also need to produce a destruction certificate (get it from your customer as a documentary proof).

3 Dated: 8-12-2018

Thanks Sri Yadhav for your reply.

4 Dated: 28-12-2018
By:- Spudarjunan S

My Opinion on the above query:-

Q.1 -

For the purpose of duty free imports for DTA under Advance Authorisation or EOU, the main condition to be fulfilled for availing the benefit to make exports.

In terms of sec 2(18) of Customs Act,1961 - "export" with its grammatical variations and cognate expressions, means taking out of India to a place outside India.

In terms of FEMA and RBI circular, it is obligation of exporter to realise and repatriate the export proceeds within 9 months from the date of export, in case of goods export to warehouse established outside India the time limit is 15 months from the date of export . However, in case an exporter couldn't realise the proceeds he can apply to AD for remitting the export proceeds or self-write off subject to fulfillment of certain conditions listed by RBI with proportionate reversal of export incentives claimed (i.e. Duty Drawback etc.)

Further, under FTP for getting Export obligation discharge certificate for Advance Authorisation and debonding of EOU the concerned person has to submit the corresponding e-BRC or documents for realisation of foreign exchange for respective export consignments. So it is clear that in order to avail the benefit of Advance Authorisation/EOU/EPCG and so on FTP benefit scheme, the export should be wholesome i.e. a complete cycle from shipment to realisation of proceeds.

Further, in terms of notification no.89/2017 Cus (N.T) dated 21.09.2017 exports made by 100% EOU/ SEZ/under Advance Authorisation/any duty exemption scheme of FTP are not allowed to claim duty drawback.


MEIS benefit can't be claimed for this transaction since the scrip is allowed on the FOB value as per shipping billing or foreign currency realized WHICHEVER IS LOWER.(Refer Para 3.04 of FTP 2015-20) In this case the realized consideration is zero so MEIS is not eligible. So there is no question of reversal of MEIS.


I couldn't find any specific procedure mentioned for specific procedure for such destruction.


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