Lakshmi Kumaran & Sridharan AttorneysAn ISO 9001 / 27001 certified law firm

Amnesty scheme to regularize export obligation default cases

28th October, 2013

Indian Ministry of Commerce has prescribed a procedure for regularization of Export Obligation (EO) default cases under Advance authorization, DFIA and EPCG Schemes. As per the scheme, an applicant intending to regularize the case has to pay customs duty and interest not exceeding the customs duty portion and provide evidence of such payment to the Regional Authority (RA) who will issue closure letter. To regularize the default, Customs duty can be paid either by cash or by debiting valid duty credit scrips issued under Chapter 3 of Foreign Trade Policy (FTP) but interest is required to be paid only in cash.            

According to latest DGFT Policy Circular No. 8/2009-2014 (RE 2013), dated 25-10-2013, the scheme which is valid till 31-3-2014 is available even for cases which have already been adjudicated (or pending adjudication), either originally or are in appeal. In this regard, the closure letter is to be submitted to the adjudicating or the appellate authority and then Adjudicating/Appellate Authority will decide on closure of such case/appeal informing the same to the firm and to the RA concerned.    

The regularization provisions were relaxed by the Ministry in August this year by Public Notice No. 22(RE-2013)/2009-2014 wherein the interest component in case of regularization of EO default was limited to the customs duty amount payable. This relaxation was followed by consequential amendment by Notification No. 46/2013-Cus., dated 26-9-2013 of the Ministry of Finance amending various Customs exemption notifications which give effect to exemption under these specified export promotion schemes.

Cases where export obligation period is yet to be over, are not covered under this scheme and no refund further will arise on account of choosing this option by the defaulting exporter.
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