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Incorrect simultaneous issuance of dual benefit of Zero duty EPCG and SHIS to exporters under the FTP 2009-14 - option providing flexibility to return either benefit

Customs - 45/2016 - Dated:- 23-9-2016 - CIRCULAR NO 45/2016-Customs F.No.605/60/2013-DBK GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE (CENTRAL BOARD OF EXCISE AND CUSTOMS) DRAWBACK DIVISION New Delhi Dated 23rd September, 2016 To Pr. Chief Commissioners/Pr. Directors General Chief Commissioners/Directors General Pr. Commissioners/Commissioners (All under CBEC) Subject: . The undersigned is directed to say that instances of simultaneous issuance of zero duty EPCG and SHIS were de .....

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s, 102/2009-Cus, 22/2013-Cus, 5/2013-Cus, 23/2013-Cus and SHIS notification No. 104/2009-Cus and clarifications made in Circular Nos. 26/2009-Cus and 38/2010-Cus, the Public Notice No. 30/2015-2020 dated 8.9.2016 (copy attached) has been issued by the Department of Commerce (DGFT) with the concurrence of Department of Revenue. The aspects notified in the Public Notice are self-explanatory. The Ministry directs that pending issues related to the simultaneous issuance or availing of zero duty EPCG .....

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ided by the Commissioners. (Dinesh Kumar Gupta) Director Encl : As Above Government of India Ministry of Commerce & Industry Department of Commerce Directorate General of Foreign Trade Public Notice No. 30/2015-2020 New Delhi dated the 8th September, 2016 Subject: Notification of procedure to be followed in cases of incorrectly issued simultaneous benefits of Zero Duty EPCG and SHIS in FTP 2009-14 by the Director General of Foreign Trade in exercise of powers conferred under Para 2.04 of the .....

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cided that exporters who have been issued or availed such simultaneous benefit of these schemes shall be allowed flexibility, to the extent specified in this public notice, to choose one of the two schemes. The option to return either benefit shall be subject to the following:- A. Return of SHIS In case of return of SHIS (including splits), the unutilized SHIS (part or whole) may be surrendered by the original holder to whom such SHIS was issued by surrender of the original SHIS scrip. The amoun .....

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SHIS was issued based on exports of immediately preceding year and then zero duty EPCG was also issued, and the exporter opts to return the SHIS, the power under Para 2.58 of FTP 2015-20 in consultation with relevant Committee would be exercised by DGFT to relax the FTP/HBP provisions requiring the 'prior' return of SHIS. B. Return of zero duty EPCG/Post Export EPCG When zero duty EPCG (i.e. all relevant authorizations) has to be returned, the amount equivalent to the duty forgone shall .....

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y paying the differential duties plus applicable interest (at the rate prescribed under Section 28AA) from date of clearance of the goods till the date of payment. In such cases, SHIS scrip need not be surrendered. This option shall not be available when the zero duty EPCG is already redeemed by DGFT. When zero duty Post Export EPCG is to be returned, the authorization(s) shall be surrendered. If any related duty credit scrip(s) against such Zero duty Post Export EPCG authorization(s) have been .....

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y including for purposes of payment of interest by exporter. C. Mode of payment The amount shall be paid back to Government in cash. The facility of debiting the amount in valid freely transferable duty credit scrip issued under Foreign Trade Policy or in valid SHIS scrip held by the original holder to whom it was issued, shall be allowed for paying the refund part. However, interest part shall be always paid in cash. D. Time Frame A time frame of 9 months from provision of option by DGFT is all .....

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efits. F. Consequential Action by CBEC The CBEC would be issuing a separate Circular for guidance of its field formations. Effect of this Public Notice: The exporters who have incorrectly availed simultaneous benefit of zero percent EPCG and SHIS have been provided an option to surrender one of the benefits subject to certain conditions. (Anup Wadhawan) Director General of Foreign Trade [Issued from F.No. 01/61/180/41/AM-13/PC3(Pt.)] Annexure to Public Notice No. 30 /2015-20 dated 08.09.2016 Dif .....

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EPCG Year SHIS issued 0% EPCG issued REMARKS (reference to 0% EPCG includes 0% PE-EPCG import authorization) Year 1 2009-10 Not Relevant Year 2 2010-11 S1 E EPCG issued first. Wrong issuance of SHIS. S1 will lapse forever i.e. S1* and S1** will not be available in future, as E has been availed. S1 E SHIS issued first. Wrong issuance of EPCG If SHIS benefit availed was not already surrendered, or refunded with applicable interest in case utilized. N E S1 will lapse forever i.e. S1* and S1** will .....

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e interest in case utilized. N E S2 will lapse forever i.e. S2* and S3** will not be available in future, as E has been availed. S1 * N Scrip has been correctly issued, provided 0% EPCG has not been availed in 2010-11. S2 N Scrip has been correctly issued N N Not Relevant Year 4 2012-13 S1** E EPCG issued first. S1** available if EPCG not availed in 2010-11. S2* E EPCG issued first. S2* available if EPCG not availed in 2011-12. S3 E EPCG issued first. Wrong insurance of SHIS. S3 will lapse forev .....

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