Amnesty scheme for one time settlement || Not to be missed opportunity

In line with "Vivaad se Vishwaas" initiative, which sought to settle tax disputes amicably, the government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations. This scheme is intended to provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations, and who are burdened by high duty and interest costs associated with pending cases.

All pending cases of the default in meeting Export Obligation (EO) of authorizations mentioned can be regularized on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation. This is one time scheme and is one of its type.

The interest payable is capped at 100% of these exempted duties under this scheme.?However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty and this is likely to provide relief to exporters as interest burden will come down substantially.

It is hoped that this amnesty will give these exporters a fresh start and an opportunity to come into compliance.?

Coverage:

One time facility is being provided for grant of EODC/ regularisation of cases of EO default of Advance Authorisation and EPCG authorizations under “Amnesty scheme for one time settlement of default in export obligation by Advance and EPCG?authorization holders”. The coverage of scheme is

i.?The Authorisations issued under Advance Authorisation Scheme (all variants) and EPCG Scheme (all variants) issued under?Foreign Trade Policy, 2009-14 till March 31, 2015 are covered under the Scheme.

?ii. For Authorizations issued under Advance Authorisation Scheme (all variants) and EPCG Scheme (all variants) issued under?Foreign Trade Policy, 2004-2009 and before, the coverage is limited to those authorizations whose Export Obligation Period (original or extended) was valid beyond August 12, 2013.

?The scheme

i.???????????????This scheme is called “Amnesty scheme for one time settlement of default in export obligation by Advance and EPCG authorization holders”

?ii.??????????????All pending cases of the default in meeting Export Obligation (EO) of authorizations mentioned in para (I) above can be regularised by the authorisation holder on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation and interest at the rate of 100% of such duties exempted. However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty.

iii.????????????All those authorization holders who are interested to avail the Scheme shall register themselves in website: https://www.dgft.gov.in in a separate application form provided for this purpose by filling all relevant details.

iv.?????????????Thereafter, if entire authorization is under default, the applicants can pay Customs duty plus interest with the Jurisdictional Customs authorities concerned and submit proof thereof to the Regional Authority of DGFT concerned.

?v.??????????????If there is partial default, the Regional Authority of DGFT on the basis of specific request of the applicant and on the basis of application filed for Export Obligation Discharge Certificate along with the necessary supporting documents, shall intimate to the applicant the details of default on which Customs duty and interest is payable.

?vi. The applicant thereafter can pay Customs duty plus interest with the Jurisdictional Customs authorities concerned and submit proof thereof to the regional authority of DGFT concerned.

vii. Any authorisation holder choosing to avail this benefit must complete the process of registration as mentioned in para (iii) above on or before June 30, 2023 and payment of Customs duty plus interest with the Jurisdictional Customs Authorities concerned shall be completed by September 30, 2023.

viii. Based on the evidence of such payment and other relevant documents as prescribed under the Handbook of Procedures, concerned RA may examine the request and issue a letter granting Export Obligation Discharge Certificate (EODC).

ix. Even cases which have already been adjudicated (or pending adjudication), either originally or in appeal, can also be regularized under this Public Notice.

The procedure for regularization of such cases would be as under :-

a. In respect of cases which have already been adjudicated (or pending adjudication) and where appeal has not been filed, firms will produce a copy of this closure letter from the concerned RA, to the Adjudicating Authority.

b. In case an appeal has been filed, then this closure letter will have to be submitted to the Appellate Authority. On submission of such closure letter Adjudicating Authority/Appellate Authority will decide on closure of such case/appeal and will inform the same to the Appellant and to the concerned RA.

x. Cases under investigation or cases adjudicated for/involving fraud, misdeclaration or unauthorised diversion of material and/or capital goods will be excluded from the coverage.

xi. Neither CENVAT Credit nor Refund, under any provision of law, of any amount shall be allowed on duties paid under this scheme. The applicant shall also give an undertaking that they will not file any application for CENVAT Credit or refund of any duty paid under this scheme before any authority and/or before any court of law.

xii. If duty along with applicable interest has already been deposited in full, the case would not be eligible for coverage.

xiii. Necessary procedures including a system of filing required reports by the respective RAs would be indicated separately.

Here are few examples

[Example 1: Where entire EO could not be fulfilled:?– If the default in EO is 100%, this would mean the complete duty saved amount has to be refunded. The interest on this duty saved amount has to be calculated from the date of import till the date of payment. In the total CIF value of unutilised exempted material is say Rs. 100/-, all the customs duties (including Additional Customs Duty and Special Additional Customs Duty) exempted is say Rs.50/- . The Customs duties exempted (except Additional Customs Duty and Special Additional Customs Duty) portion is say Rs.32/- then interest payable is maximum of Rs. 32/- (100% of Rs.32/-). Therefore for regularising this case the maximum amount payable by the authorisation holder would be Rs. 50 + 32/- = Rs.82/-.

Example 2: Where there is a shortfall in EO fulfillment:- In the total CIF value of authorization is say Rs. 500/-, the default in EO were 40%, then the corresponding CIF value of duty saved amount becomes Rs. 200 (40% of Rs. 500). All the customs duties exempted (including Additional Customs Duty and Special Additional Customs Duty) is say Rs.100/- . The Customs duties exempted (except Additional Customs Duty and Special Additional Customs Duty) portion is say Rs.64/- then maximum interest payable is Rs.64/- (100% of Rs.64/-). Therefore for regularising this case the maximum amount payable by the authorisation holder would be Rs. 100 + 64/- = Rs. 164/-]