CBEC needs to be congratulated and also to be appreciated for bringing radical change in the operations of the EOU/EHTP/STP/BTP Units. Hon’ble Prime Minister of India will be very happy for such initiatives taken by CBEC appreciating the difficulties faced by EOU/EHTP/STP/BTP Units and created conducive & trust based environment which will initiate lot of FDI to support “Make in India” movement.
In the last month as a part of Ease of Doing Business action plan, Warehousing Provisions for goods were substantially simplified but still EOU/EHTP/STP/BTP Units were not being given the preferential treatment even though they bring good amount of Foreign Exchange also create employment which was explained to Chairman CBEC & Mr. Sandeep Kumar, Commissioner of Customs, CBEC and also submitted detailed alternatives for ease of doing business for EOU/EHTP/STP/BTP Units.
Within 15 days. CBEC has issued the notification no 44/2016-Cus dated 29th July 2016 and detailed circular no 35/2016-Cus dated 29th July 2016 not only dispensing “Bonding and Manufacture in Bonded Premises requirement” but also made procedural simplifications with 100% trust and totally avoiding interface with the Excise & Custom Officials but ensuring record based strict accounting of duty free material and monitoring input & output norms. Date of freedom is announced as 13th August 2016 i.e. 2 days ahead of independence day of India.
- Impact of the amendments
Notification No. 52/2003-Cus dated 31.03.2003 has been amended so as to delicense the EOU/EHTP/STP/BTP units as bonded warehouse under Customs Act, 1962 with effect from 13th August, 2016.
In short, the EOU/EHTP/STP/BTP units need not to have bonded warehouse license under Section 58 and permission Section 65 of Customs Act, 1962. In effect these units need not to comply with various warehousing provisions.
The Warehoused Goods (Removal) Regulations, 2016, The Warehouse (Custody and Handling of Goods) Regulations, 2016 and Public Warehouse Licensing Regulations, 2016 will no longer be applicable.
Following warehousing provisions need not to be complied by EOU/EHTP/STP/BTP units:
- No need for application to Principal Commissioner for private bonded warehouse under Section 58 & permission under 65 of Customs Act, 1962.
- No need to provide various undertakings to Principal Commissioner
- No need to appoint warehouse keeper and obtain digital signature of such person
- No need to provide all insurance risk policy to Principal Commissioner
- No need to obtain warehouse code from jurisdictional Customs officer
- Bill Entry for Home Consumption will be required at the clearance from Port of Import instead of Bill of Entry for warehousing.
- No re-warehousing is required to be done by these units after 13th August 2016.
- No permission is required to be obtained for supply of goods from one unit to other.
- No inspection of seal/goods by proper officer.
- No need to file ex-bond bill of entry at the time of removal of goods from premises of EOU/EHTP/STP/BTP units.
- Records to be maintained:
- Such units need to maintain records of receipt, storage, processing and removal of goods imported by such units under Notification 52/2003 Cus. as per new formats prescribed in the Circular 35/2016 Cus dated 29th July 2016.
- The records to be maintained in digital format as per the details contained in the Form A provided in circular 35/2016 Cus dated 29th July, 2016.
- The records of goods received on or after 13th August 2016 shall be maintained as per Form A. The information regarding the stock of goods lying with the unit need to be integrated into the digital record prescribed under this circular.
- Further, details of goods (inputs, packing material, spares, consumables, components etc) of processing is completed or cleared from the unit need not to be incorporated in the digital records. Data relating to capital goods which are already cleared need not be updated in the digital records
- All units are required to enter data accurately and immediately upon the goods being received in or removed from the unit. The digital records should be kept updated, accurate, complete and available at the unit at all times for verification by the proper officer, whenever required.
- The records cannot be maintained in the excel format since it is mandate to keep the records in digital form. The software for maintenance of digital records must incorporate the feature of audit trail which means a secure, computer generated, time-stamped electronic record that allows for reconstruction of the course of events relating to the creation, modification, or deletion of an electronic record and includes actions at the record or system level, such as, attempts to access the system or delete or modify a record.
- Procedure for Import:
- The Units shall continue to obtain / furnish a Procurement Certificate at the Customs Station at the time of import or pre-authenticated procurement certificates, as applicable to them;
- Upon receipt of goods in the unit, a copy of the relevant bill of entry shall be provided to the jurisdictional office;
- The jurisdictional office shall reconcile the imports with procurement certificates.
- Procedure for Inter-unit transfer of Capital Goods and manufactured goods:
- Prior intimation to given to the jurisdictional Central excise officer.
- Any procurement by one unit from another should be supported by a procurement certificate or pre-authenticated procurement certificates, as applicable;
- The supply of the goods from one unit to another shall be based upon the usual commercial documents, such as, invoice & delivery challan;
Upon receipt of goods, copies of documents shall be provided to the jurisdictional office of the sending and receiving unit by way of intimation;
- Monthly Return:
A digital copy of Form A, containing transactions for the month, shall be provided to the proper officer, by the 10th day of subsequent month in a CD or Pen drive, as convenient to the unit. Freedom has been given to make suitable addition compilation of the related information considering the requirement of the unit.
It is expected that similar amendment in notification and procedures to be made in Notification 22/2003 CE dated 31.03.2003 for procurement of Indigenous goods or there may be a possibility to reside the said notification which would be in line with model GST Law.
While rejoicing we give below the list of work to be done immediately,
- Completion of the Bond register and reconciliation thereof.
- Verification of the duty free indigenous & imported capital goods as on 13th August 2016 reconciling with the Bond Register and carry forward the same for the record keeping requirement mentioned in point B above and monthly returns.
- Reconciliation of Job Work challan & stock lying the job worker as on 13th August 2016 and carryforward the same in the for the record keeping requirement mentioned in point B above and monthly returns.
- Verification of the stocks of duty free imported & indigenous raw material, consumable as on 13th August 2016 and carry forward the same for the record keeping requirement mentioned in point B above and monthly returns.
- If input & output norms are not fixed or all items are not covered under prescribed SION (Standard Input & Output Norms) then suitable application for fixation / modification of SION.
- Monitoring of actual consumption with Input & Output norms and payment of duties in case of adverse variance / excess consumption.
- Upgradation of existing software system to comply with the above requirement especially maintaining Bill of entry wise & Item wise consumption & stock of each material.
All EOU/EHTP/STP/BTP Units needs to gear-up to really enjoy the process of liberalization and the fruits of ease of doing business.