INDIRECT TAXATION

AMENDMENTS FOR
NOV 21
CA FINAL #MGST

(By CA MAHESH GOUR)

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 INDIRECT TAXATION

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 INDIRECT TAXATION
CHPTER 8 :- INPUT TAX CREDIT

Note: 5% ITC Allowed on Provisional Basis [RTP-May 21]

A taxpayer filing GSTR-3B can claim provisional ITC (in respect of invoice or debit note,
the details of which have not been uploaded by the supplier) only to the extent of 10% 5% of

the eligible credit available and reflect in GSTR 2A/ and GSTR 2B (GSTR 2B is an auto-
drafted ITC statement generated for every registered person based on GSTR-1 filed by supplier)

(w.e.f. 01/01/21)

Sr. No. Particualrs Before Amendment After Amendment

A Eligible ITC available in the Purchase register 2,00,000 2,00,000

B Eligible ITC available in the GSTR-2A 1,20,000 1,20,000

C ITC that can be claimed as provisional credit 12,000 6,000

D Total ITC that can be claimed in the GSTR-3B 1,32,000 1,26,000

E ITC not allowed in the GSTR-3B 68,000 74,000

➔Points To Be Noted:
1. Invoices on which ITC is not available under any of the provisions e.g., under

section 17(5), are not to be considered for calculation of 10% 5% of the eligible
credit available

2. Restricted ITC (10%) (5%) is calculated on a consolidated basis on total eligible

ITC from all suppliers against all supplies whose details have been uploaded by
the suppliers

Rule 86 B:- Restrictions on use of amount available in electronic credit ledger.

a registered person shall not use the amount available in electronic credit ledger to

discharge his liability towards output tax in excess of 99% of such tax liability, in

cases where the value of taxable supply other than exempt supply and zero-rated

supply, in a month exceeds ₹ 50 lakh.

Notes: - It means ITC will be Utilized 99% of TAX liability

Or w.e.l
Actual ITC

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Analysis: -
Jan 21 Feb 21 March 21 April 21
Taxable Supply 10L 30L 50L 51L
Exempt Supply 20L 10L 20L 5L
Zero Rated Supply 40L 15L 5L 0
ATO 70L 55L 75L 56L
Application of Rule 86B

Example 1: -

Suppose Taxable value of Inter-state supply in month of Feb 21 = ₹ 100L [IGST @18%]
Output Tax liability of Mr MG is IGST= ₹ 18,00,000
Balance available in electronic credit ledger ₹ 30,00,000

Effect :- Output Tax liability will be discharged

99% of 18,00,000=17,82,000 1% of 18,00,000=18,000

(Through electronic credit ledger) (Through electronic cash ledger)

Example 2: -

Suppose ITC Credit ledger Balance is 15L

Mr. MG discharge his tax liability 15L 15L through electronic credit ledger.

3L through electronic cash ledger.

Exceptions of Rule 86B:-

This restriction shall not apply in following cases:-
a) If:-
✓ Person
✓ Proprietor
✓ Karta
✓ MD
✓ WTD
✓ Any of 2 Partner
4
✓ Members of managing
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Have paid Income Tax in each of

the last 2 FY > ₹ 1,00,000

(b) Where the registered person has received a refund of more than ₹ 1 lakh in the preceding

FY on account of unutilised ITC in case of (i) zero rated supplies made without payment

of tax or (ii) Inverted Tax structure.

Analysis: -
In Preceding FY.

Refund of Unutilized ITC is > Rs. 1L in case of

ZR’S Inverted Tax Structure

(c) Where the registered person has discharged his liability towards output tax through the

electronic cash ledger for an amount which is in excess of 1% of the total output tax
liability, applied cumulatively, upto the said month in the current financial year.

Analysis
ITC Cash
Tax Liability (-) ITC Ledger
April 20L 19L 1L (Above 1%)

May 30L 28L 2L (Above 1%)

June [Current Period] - > Rule 86B Not applicable

(d) Where the registered person is:-

→ Government Department
→ Public Sector Undertaking

→ Local authority
→ Statutory body

However, the Commissioner or an officer authorised by him in this behalf may remove the

said restriction after such verifications and such safeguards as he may deem fit.
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[Notification No. 94/2020 CT dated 22.12.2020]

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CHAPTER 9. REGISTRATION
Flow Chart for Procedure of Registration

Every person liable to get registered and person seeking voluntary registration shall, before
applying for registration, declare his Permanent Account Number (PAN), Details of Aadhar
card, mobile number, e-mail address, State/UT in Part A of FORM GST REG-01 on GST
Common Portal.

PAN Validated online by Common Temporary Reference Number (TRN) is

Portal from CBDT Database. Mobile generated and communicated to the

number and email verified through applicant on the validated mobile

number and e-mail address.
one time password sent to it.

On receipt of such application, an Using TRN, applicant shall electronically

acknowledgement in the prescribed form submit application in Part B of
shall be issued to the applicant application form, along with specified

electronically. A Causal Taxable Person documents at the Common Portal.

(CTP) applying for registration gets a

TRN for making an advance deposit of Application shall be forwarded to
tax in his electronic cash ledger and an Proper Officer

acknowledgement is issued only after

said deposit.* Proper officer examines the application
and accompanying documents

Is the application and the accompanying documents in proper order?

Yes NO

Within 3 7 Proper office issues notice electronically, within 3 7 working days from application

working days date thereby seeking clarification*, information or documents from the applicant

from the date

of application Has the applicant furnished the clarification, information and

documents within 7 working days from receipt of notice?

Proper officer will grant

registration certificate in
form GST REG-06

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YES YES
Is the Proper Officer satisfied?

Within 7 working days from the NO NO

date of receipt of information/

Proper office will may reject the
Clarification/ Documents
application for reason to be recorded
in writing.
Concept of Deemed Registration under Registration Procedure :-

Citizen of India No Notified person U/S 25 (6D)

Yes

Person is- Date of Submission of

(a)Individual No Registration Application is
(b)Authorised signatory 7

(c)Managing or Authorised partner Actual date of submission of part

(d)Karta of HUF B of GST REG-01
Yes

Section 25 (6B) Applicable If no Action is taken by PO on Registration

application within 3 7 working days

Possession of Aadhaar
Yes Deemed Registration

An Applicant having Aadhaar but

Applicant not willing to obtain
No
Does not want to opt For AA Aadhaar just for Getting GST
No registration

AA whether Successful within 15 Yes

Yes
Days of Submission of part B Identity verification by
Yes No Alternative means

Date of submission of Identity verification by • Physical verification

Registration Application Alternative means • Documentary verification

• Physical verification
Date of Authentication • Documentary Date of submission of
of the Aadhaar number verification Registration Application is

Date of submission of Actual date of submission of

Registration Application part B of GST-REG-01

15th day from the8 date of If no action is taken by Proper

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If No Action is taken by PO Within 3 7 Working

Sec 25(6D): Exceptions of Sec 25(6B)/ (6C) (From 01.04.2020)

days
Deemed registration. Sec 25(6B)/ (6c) shall not apply to following person

Person who is not a Class of Person other than the Following class of person, namely:
citizen of India (a) Individual;
(b) Authorized Signatory of all types;
(c) Managing and Authorized partner; and
(d) Karta of HUF.

1. A person who is not a citizen of India

2. Department or establishment of State Government or Central Government

3. Local authority
4. Statutory body

5. Public Sector Undertaking

6. A person applying for Unique Identity Number.

Note : physical verification of business premises in certain cases [Rule 25]

(a) a person fails to undergo authentication of Aadhaar number as specified in rule

8(4A) or does not opt for authentication of Aadhaar number; or

(b) the proper officer, with the approval of an officer authorised by the Commissioner not
below the rank of Assistant Commissioner, deems it fit to carry out physical verification of

places of business, the registration shall be granted within 30 days of submission of

application, after physical verification of the place of business in the presence of the said person,

in the manner provided under rule 25 and verification of such documents as the proper officer

may deem fit.

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V) Violation of conditions of taking ITC, mismatch of GSTR-1 and GSTR- 3B, or violation of

rule 86B, to make the GST registration of a person liable to cancellation:-

avails ITC in violation of the

provisions of section 16 of the CGST
Act or the rules made thereunder

Registered person

violates the provision of rule 86B
(Restriction on use of amount
available in electronic credit
ledger)
furnishes the details of outward supplies in
Form GSTR-1 for one or more tax periods
which is in excess of the outward supplies
declared by him in his valid return under
section 39 for the said tax periods

Opportunity of being heard: The proper officer shall not cancel the registration without
giving the person an opportunity of being heard.

Rule 21A Provision relating to suspension of GST registration amended :-

Rule 21A of the CGST Rules which provides for suspension of GST registration has been

amended as follows:-

(i) Where the proper officer has reasons to believe that the registration of a person is

liable to be cancelled, he can now suspend the registration of such person, pending
the cancellation proceedings, without affording the said person a reasonable
opportunity of being heard [Sub-rule (2) amended].
Analysis: -
Jan 21 Jan 21
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 INDIRECT TAXATION

Supply of Goods Supply of Goods

Value 1,00,000 Value 1,50,000

GST 18,000 GST 27,000

Mr. A 1,18,000 Mr. MG 1,77,000 Mr. B

➢ Now Mr. MG Claim ITC Rs. 25,000 instead of Rs. 18,900 [18,000+5% of 18,000]

➢ It is a violation of sec 16 of CGST Act.

➢ PO can suspended the registration without giving an opportunity of being heard.

(ii) Where, a comparison of the returns furnished by a registered person under section
39 with:

(a) The details of outward supplies furnished in Form GSTR-1; or

(b) The details of inward supplies derived based on the details of outward supplies furnished

by his suppliers in their Form GSTR-1, or such other analysis, as may be carried out on the
recommendations of the Council, show that there are significant differences or anomalies

indicating contravention of the provisions of the CGST Act or the rules made thereunder,
leading to cancellation of registration of the said person, his registration shall be suspended.
Said person shall be intimated in prescribed form by sending a communication to his e-mail

address provided at the time of registration or as amended from time to time. In this

intimation for suspension and notice for cancellation of registration, the said differences

and anomalies are highlighted and said person is asked to explain, within a period of 30

days, as to why his registration shall not be cancelled [New sub-rule (2A)].
Analysis: -

Supply of Goods
Value 10,00,000

GST 1,80,000

Mr. X 11,80,000 Mr. B

Mr. X Furnished GSTR – 1 & show the tax liability Rs. 1,80,000 but Mr. X paid liability Rs.
1,50,000 & shown such amount 1,50,000 in GSTR – 3B impact

i. PO Suspend the registration.

ii. Sending SCN for cancellation of Registration & high such difference Amount Rs.
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30,000

iii. RP will replay within 30 days.

iv. Replay is Satisfaction

Yes No

PO shall drop the proceeding Registration is liable to be Cancelled

(iii) In a case where the cancellation is initiated by the Department on its own and

registration of a person has been suspended, such person shall not be granted any refund
under section 54 of the CGST Act, during the period of suspension of his registration

[New sub-rule (3A)].

Analysis: -
Impact of Suspension
1) Such person, whose registration has been suspended under Rule 21A(1), (2), (2A)

✓ Shall not make Taxable Supply.

✓ Shall not Furnish return u/s 39.
✓ Shall not issue Tax Invoice for Such period.

✓ Shall not charged tax on supplies made by him.

2) If Registration Suspended Under Rule 21A(2)/(2A)

Refund U/S 54 not allowed during the period of Suspension.

It means suspension Under Rule 21A (1) (RP applied for cancellation of registration)

refund u/s 54 allowed.

(iv) Sub-rule (4) provides that the suspension of registration shall be deemed to be

revoked upon completion of the cancellation proceedings by the proper officer with effect from

the date on which the suspension had come into effect. A proviso has been inserted to rule
21A(4) which provides as follows:
The suspension of registration may be revoked by the proper officer, anytime during the

pendency of the proceedings for cancellation, if he deems fit.

(v) Consequential amendments by virtue of insertion of sub-rule (2A) to rule 21A have been
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made in sub-rule (3) & sub-rule (4) of rule 21A and in sub-rule (3) & sub-rule(4) of rule 22.

[Notification No. 94/2020 CT dated 22.12.2020]

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CHAPTER 10A. TAX INVOICE, CREDIT AND DEBIT NOTE

RULE 48(4) E-INVOICING MANDATORY FROM 01.04.20

If Supplier & Recipient both are Registered person (B-B Supply)

&
Annual Aggregate Turnover > ₹ 50Cr in any preceding FY from 2017-18 onward.

E-Invoice is Compulsory

In short, we can say that E-Invoice is compulsory by registered person having aggregate

annual turnover in excess of ₹ 50Cr for all B2B Supplies. [w.e.f 01.04.21]

Note: -

1. QR Code is mandatory for tax payer having turnover [from FY 2017-18 onwards] > 500Cr in

B2C Segment.

2. Every invoice issued by a person under Rule 48(4) other than specified manner shall not be

treated as invoice

3. Rule 48(1) & 48(2) shall not apply to an invoice prepared in the manner specified in Rule

48(4).

Harmonised System of Nomenclature code (1.4.21)

Note: - HSN Code not required in a tax Invoice

1) Supply B - C

2) ATO of PY = upto 5 cr.

Analysis
Nature of Supply ATO > 5 Cr. ATO < 5 Cr.
1 B2B Supplier Mandatory 6 digit Mandatory 4 digit
2 B2C Supplier 6 digit Optional 4 digit

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INDIRECT TAXATION

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CHAPTER 10B. E-WAY BILL

VALIDITY OF E-WAY BILL

Sr. No. Distance Validity Period

1. Up to 100 km 200km One day in cases other than Over

[w.e.f 01.01.21] Dimensional Cargo or

multimodal shipment in which

at least one leg involves transport

by ship

2. For every 100 km 200km. or One additional day in cases other

part thereof thereafter than Over Dimensional

Cargo or multimodal shipment in

which at least one leg involves

transport by ship

3. Upto 20 km. One day in case of Over

Dimensional Cargo or
multimodal shipment in which at
least one leg involves transport
by ship

4. For every 20 km. or part thereof One additional day in case of

thereafter Over Dimensional Cargo or

multimodal shipment in which at
least one leg

Example:-

A registered person has to transport goods from its warehouse to its

depot located at a distance of 500 km. In the given case, if e-way bill
was generated before 01.01.2021, it would have been valid for 5 days.

However, an e-way bill generated on or after 01.01.2021 would be valid

for only 3 days.

Rule 138E (d):- Any person whose registration has been suspended under Rule 21A
(In case Registration cancellation proceeding is pending)

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Generation of E-way Bill is Block.[w.e.f 22.12.20]

CHAPTER 12 RETURN
Quarterly Return Monthly Payment (QRMP) Scheme
File GSTR – 1 & 3B Quarterly

QRMP From 1st Jan 2021

Payment Monthly

A) Elegibility for If Tax Payers having Aggregate Turnover in preceeding financial year

QRMP scheme ≤ Rs. 5 Crore.

B) Optional Scheme It is an optional return filing scheme, which, once exercised, shall
continue for future tax period automatically. It means there is no need

to exercise the option every quarter.

C) How to opt in for Taxpayer can opt out from the GST portal GST.GOVIN > Serivices >

the scheme Returns > Opt-in for Quarterly Return option to opt in or opt out of
the QRMP scheme.

D) GSTIN-wise Taxpayer have option to avail the scheme GSTIN Wise i.e. some

Scheme GSTINs for a PAN can opt in and other can opt out.

E) Condition To opt the QRMP scheme, It is necessary that the Registered person
regarding preceding must have furnished the return for the preceding month, as due on the

month return date of exercising such option.

For Example:-

→ Mr. ‘X’ wish to opt QRMP Scheme for Quarter'April to June'

→ On 27th April Mr. ‘X’ exercise this option

→ He must have furnished the return for the month of March on
the due date.

F) Manner of Can opt in for any quarter from first day of second month of
exercising option of preceeding quarter to the last day of first month of quarter for which

QRMP Scheme want to opt for the scheme.

For Example:-

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 INDIRECT TAXATION

If a taxpayer wants to opt in for January to March quarter can

exercise option during 1st November to 31 January.

Optional once exercised shall be valid for succeeding quarter also.

G) Lapse of QRMP The following are the relevant points:-

scheme

a) Case 1 b) Case 2
Voluntary Opt When becomes
out of the scheme ineligible for scheme

. The facility for opting out of the • If aggregate turnover of the registered person
scheme for a quarter will be available crosses Rs. 5 crore during a quarter in a
from 1st day of 2nd month of preceding financial year, he shall not be eligible for
quarter to the last day of the 1st month QRMP scheme.
of the quarter. • In that scenario, he shall furnish return on
monthly basis from the first month of the
succeeding quarter.
For example: A registered person has availed the
QRMP scheme from 1st January, 2021. During the
financial year 2021-22, his aggregate turnover
crosses Rs. 5 crore on 19th August 2021. Now, such
person will furnish monthly return from the first
month of the succeeding quarter i.e. October to
December.

H) Form and manner The details of outward supplies are required to be furnished,

Of furnishing electronically, in Form GSTR-1, for the month or quarter. There are

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 INDIRECT TAXATION

GSTR-1 two ways:

a) When registered b) When IFF is not

person opts IFF opted

He may furnish the details of outward
supplies to a registered person, for the 1st and
2nd months of a quarter, using Invoice
Furnishing Facility (IFF). Invoices pertaining
to last month of a quarter are to be uploaded
in GSTR-1 only.
He has to upload invoice details for all
the 3 months of the quarter in Form
GSTR-1.
It may be noted that the IFF is not
mandatory but an optional facility.

I) Form and manner The due date for filing Quarterly GSTR-3B is on or before 22nd or
Of filing GSTR-3B 24th of the month succeeding the quarter for which return is furnished.

For taxpayers opted It has to be furnished electronically as per following details:

For QRMP scheme

For registered persons whose place of Due date

business is in
the States of Chhattisgarh, Madhya 22nd day of the month
Pradesh, Gujarat, Maharashtra, succeeding such quarter.
Karnataka, Goa, Kerala, Tamil Nadu,
Telangana, Andhra Pradesh, Union
territories of Daman & Diu & Dadra &
Nagar Haveli, Puducherry, Andaman
and Nicobar Islands or Lakshadweep.
the States of Himachal Pradesh, Punjab, 24th day of the month succeeding
Uttarakhand, Haryana, Rajasthan, such quarter.
Uttar Pradesh, Bihar, Sikkim, Arunachal
Pradesh, Nagaland, Manipur, Mizoram,
Tripura, Meghalaya, Assam, West
Bengal, Jharkhand or Odisha, the Union
territories of Jammu and Kashmir,
Ladakh, Chandigarh or Delhi.

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J) Monthly payment There are following two options for monthly payment of tax during the
Of tax in GST PMT first two months and the registered person under QRMP is free to

- 06 avail either of these two tax payment methods.

Fixed sum Self-Assessment

method Method

A facility is available on the GST portal for generating an Under this method, a taxpayer will
auto-generated/prefilled challan in Form GST PMT-06. The pay the tax on outward supplies.
challan amount is calculated by the system which cannot be In this case, the taxpayer will
edited. The amount is equal to: manually arrive at the tax
• 35% of the tax paid in cash in the return for the preceding liability and deposit the same in
quarter where the return was furnished quarterly; or Form GST PMT-06. The taxpayer
• Tax liability paid in cash in the return for the last month can refer Form GSTR-2B to arrive
of the immediately preceding quarter where the return was at the amount of ITC available
furnished monthly.

ax paid in Quarter Apr-Jun’21 Tax to be paid in each month, for Jul’21 and
Aug’21
CGST 100 CGST 35
SGST 100 SGST 35
IGST 200 IGST 70

Note: - No amount may be required to be deposited for the

For the 1st month of the quarter, where For the 2nd month of the quarter, where the
the balance in the electronic cash balance in the electronic cash
ledger/electronic credit ledger is adequate ledger/electronic credit ledger is adequate for
for the tax liability for the said month or the cumulative tax liability for the 1st and
where there is nil tax liability; the 2nd month of the quarter or where there
is nil tax liability

K) Applicability of Interest

Under Self-
Assessment Method
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a) Under Fixed sum

method

No interest would be payable in case the tax due is paid Interest amount would be payable

in the first two months of the quarter by way of depositing as per the provision of Section 50

auto-calculated fixed sum amount by the due date.
of the CGST Act for tax or any part
thereof (net of ITC) which remains
unpaid / paid beyond the due
date for the first two months of the
quarter. The interest payable, if
any, shall be paid through FORM
GSTR-3B.

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CHAPTER 13 REFUNDS
Do you Know?

No restriction on recipient of deemed export supplies in availing ITC of the tax paid on

such supplies

In a case where recipient of deemed export supplies claims the refund on such supplies,

there is no restriction on such recipient in availing ITC of the tax paid on such supplies.

[Circular No. 147/03/2021 GST dated 12.03.2021]

Goods

Value = 10,00,000

Mr. A IGST= 1,80,000 Mr. B

(Supplier) EPCG Scheme Holder

mumbai (Recipient ->Surat)

Clarification:-

Mr. B claim refund of ₹ 1,80,000, & Avail ITC of ₹ 1,80,000.

d. Adjusted Total Turnover in a State/ Union Territory:

Amt in
Particulars INR

Goods:

1) Taxable supplies (Inter/Intra) XXX

2) Zero Rated Supplies (Even Exempted Supply) [As per b] XXX

Services:

1) Zero Rated Supplies (As per c. ) XXX

2) Non Zero-Rated Taxable Supplies XXX

Adjusted Total Turnover XXX

Points to be Noted:

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1) Following supplies will not be the part of Adjusted Turnover

• Value of Exempt Supplies (other than ZR’S)

• Supplies in respect of which refund is claimed under

Rule 89(4A)/(4B)

CHAPTER 24 IMPORT PROCEDURE

CUSTOMS (IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTY) RULES, 2017

The salient features of the rules are discussed hereunder:

[Rule 2] Application These rules shall apply to an importer, who intends to avail the

benefit of an exemption notification issued under section 25(1) of

the Customs Act, 1962 and where the benefit of such exemption

Is dependent upon the use of imported goods covered by that

notification for the manufacture of any commodity or provision of

output service. These rules shall apply only in respect of such

exemption notifications which provide for the observance of these rules.

[Rule 3] Definition (a) Exemption notification: means a notification issued under section

25(1) of the Customs Act, 1962.

(b) Information: means the information provided by the manufacturer

who intends to avail the benefit of an exemption notification.

(c) Jurisdictional Custom Officer: means an officer of Customs of a

rank equivalent to the rank of Superintendent or an Appraiser

exercising jurisdiction over the premises where either the imported

goods shall be put to use for manufacture or for rendering output

services.

➢ Amendments in Rule 3

The following new definitions have been inserted in Rule 3 containing

definitions

(i) Capital goods: means goods, the value of which is capitalised in the

books of account of the importer.

(ii) Job work: means any treatment, process or manufacture, consistent

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with the exemption notification undertaken by a person

on goods belonging to the importer except gold, jewellery and articles

thereof, and other precious metals or stones; and the term “job worker”

shall be construed accordingly.

The definition of “manufacture” and “output service” has been

amended as follows:-

“Manufacture” means the processing of raw materials or inputs by the

importer in any manner that results in emergence of a new product

having a distinct nature or character or use or name; and the

term “manufacturer” shall be construed accordingly.

“Output service” means supply of service excluding after-sales service,

utilizing imported goods.‘.

[Rule 4] Inform to The importer shall provide information to the Deputy Commissioner of

the Deputy Customs, or, as the case may be, the Assistant Commissioner of Customs

Commissioner / having jurisdiction over the premises where the imported goods shall be

Assistant put to use for manufacture of goods or for rendering output service except

commissioner after-sales service, about the following particulars, namely: —

(i) the name and address of the importer and his job worker, if any;

(ii) the goods produced or process undertaken at the manufacturing

facility of the importer and/or his job worker, if any, or both;

(iii) the nature and description of imported goods used in the

manufacture of goods at the premises of the importer or the job

worker, if any;

(iv) nature of output service rendered utilising imported goods.

[Rule 5] Procedure to (i) The importer who intends to avail the benefit of an exemption

be Followed notification shall provide information

(a) in duplicate, to the Deputy/ Assistant Commissioner of Customs

having jurisdiction over the premises where the imported goods

shall be put to use for manufacture of goods or for rendering

output service, the estimated quantity and value of the goods

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to be imported, particulars of the exemption notification applicable

import and the port of import in respect of a particular on such

consignment for a period not exceeding 1 year; and

(b) in one set, to the Deputy/ Assistant Commissioner of Customs at

the Custom Station of importation.

(ii) The importer who intends to avail the benefit of an exemption

notification shall submit a continuity bond with such surety or

security as deemed appropriate by the Deputy/ Assistant

Commissioner of Customs having jurisdiction over the

premises where the imported goods shall be put to use for

manufacture of goods or for rendering output service, with an

undertaking to pay the amount equal to the difference

between the duty leviable on inputs but for the exemption and that
already paid, if any, at the time of importation, along with
interest,

at the rate fixed by notification issued under section 28AA of the

Customs Act, 1956, for the period starting from the date of

importation of the goods on which the exemption was availed and

ending with the date of actual payment of the entire amount of
the

difference of duty that he is liable to pay.

(iii) The Deputy/ Assistant Commissioner of Customs having jurisdiction

over the premises where the imported goods shall be put to use for
manufacture of goods or for rendering output service, shall forward
one

copy of information received from the importer to the Deputy/

Assistant Commissioner of Customs at the Custom Station of

importation.

(iv) On receipt of the copy of the information, the Deputy/

Assistant Commissioner of Customs at the Custom Station of

importation shall allow the benefit of the exemption notification to

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the importer who intends to avail the benefit of exemption

notification.

[Rule 6] Give (1) The importer shall provide information of the receipt of the imported
goods in the premises, where the imported goods shall be put to use
Information for
manufacture of goods or job work or for rendering output service
regarding receipt of within
Imported Goods & two days (excluding holidays, if any) of such receipt to the
Maintain Records Jurisdictional Customs Officer.

(2) The importer shall maintain an account in such manner to clearly

indicate the quantity,-

(i) and value of goods imported;

(ii) of imported goods consumed;

(iii) of goods sent for job work, nature of job work carried out;

(iv) of goods received after job work;

(v) of goods re-exported, if any, under rule 7; and

(vi) remaining in stock, according to bills of entry,

and shall produce the said account as and when required by the
Deputy Commissioner of Customs, or, as the case may be, the
Assistant

Commissioner of Customs having jurisdiction over the premises or

where the imported goods shall be put to use for manufacture of
goods

or for rendering output service.

(3) The importer shall submit a quarterly return, in the form appended
to

these rules to the Deputy Commissioner of Customs, or, as the case

may be, the Assistant Commissioner of Customs having
jurisdiction

over the premises where the imported goods shall be put to use for
manufacture of goods or for rendering output service, by the tenth
day

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 INDIRECT TAXATION

of the following quarter;

[Rule 6A] Procedure (1) The importer shall send the imported goods except gold, jewellery and

for allowing imported articles thereof; and other precious metals or stones for job work, for

goods for job work manufacture of goods, after giving an intimation in duplicate to the

Jurisdictional Customs Officer of his intention to do so.

(2) The importer shall also specify the following particulars, namely: —

(i) name and address of the job worker;

(ii) nature and description of the job work to be carried on the

imported goods in the manufacturing process;

(iii) quantity and description of the goods intended to be sent to the

job worker.

(3) The Jurisdictional Customs Officer shall forward a copy of the

intimation along with the particulars specified above to the

concerned Customs officer under whose jurisdiction the premises of
the

job worker is situated.

(4) The importer shall send the goods to the premises of the job worker

enclosing a challan, specifying the description and quantity of the

goods.

(5) The maximum period for which the goods can be sent to the job

worker shall be six months from the date of issue of challan.

(6) In case the importer is unable to establish that the goods sent for
job

work have been used as per the particulars of job work, the
Jurisdictional Customs Officer shall take necessary action against
the

importer under rules 8 and 8A.

(7) The job worker shall

(i) maintain an account of receipt of goods, manufacturing process

undertaken thereon and the waste generated, if any, during such

process;
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 INDIRECT TAXATION

(ii) produce the account details before the Jurisdictional Customs

Officer

as and when required by the said officer;

(iii) after completion of the job work send the processed goods to the

importer or to another job worker as directed by the Importer for

carrying out the remaining processes, if any, under the cover of a

challan or the challan of the principal manufacturer duly
endorsed

by him.

[Rule 7] Re-export or (1) The importer who has availed benefit of an exemption notification,

Clearance of prescribing observance of these rules may re- export the unutilised

Unutilised or or defective imported goods, within 6 months from the date of import,

defective goods with the permission of the jurisdictional Deputy/ Assistant

Commissioner of Customs having jurisdiction over the premises where

the imported goods shall be put to use for manufacture of goods or for

rendering output service.

However, the value of such goods for re-export shall not be less than

the value of the said goods at the time of import.

(2) The importer who has availed benefit of an exemption notification,

prescribing observance of these rules may also clear the unutilised
or

defective imported goods, with the permission of the jurisdictional

Deputy/ Assistant Commissioner of Customs having

jurisdiction over the premises where the imported goods shall be
put
to use for manufacture of goods or for rendering output service,
within
a period of 6 months from the date of import on payment of
import
duty equal to the difference between the duty leviable on such
goods

but for the exemption availed and that already paid, if any, at the

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 INDIRECT TAXATION

time of importation, along with interest, at the rate fixed by

notification issued under section 28AA of the Customs Act, for the

period starting from the date of importation of the goods on which

the exemption was availed and ending with the date of actual

payment of the entire amount of the difference of duty that he is

liable to pay.

(3) Rule 7(3) The importer, with the permission of the jurisdictional

Deputy Commissioner of Customs or, as the case may be, Assistant

Commissioner of Customs having jurisdiction over the premises where

the imported goods shall be put to use for manufacture of goods or for

rendering output service, may clear the imported capital goods, after

having been used for the specified purpose, on payment of duty equal

to the difference between the duty leviable on such goods but for the

exemption availed and that already paid, if any, at the time of

importation, along with interest, at the rate fixed by the notification

issued under section 28AA of the Act, on the depreciated value allowed

in straight line method, as specified below, namely : —

(i) for every quarter in the first year @ 4%;

(ii) for every quarter in the second year @ 3%;

(iii) for every quarter in the third year @ 3%;

(iv) for every quarter in the fourth and fifth year @ 2.5%;

(v) and thereafter for every quarter @ 2%. Explanation. –

(1) For the purpose of computing rate of depreciation for any part of a

quarter, a full quarter shall be taken into account.

(2) There shall be no upper limit for such depreciation.

(3) The depreciation shall be allowed from the date when the
imported

capital goods have come into use for the purpose as specified in the

exemption notification upto the date of its clearance.

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 INDIRECT TAXATION

(1) The importer who has availed the benefit of an exemption

[Rule 8] Recovery notification

Of Duty in certain shall use the goods imported in accordance with the conditions
mentioned in the concerned exemption notification or take action
case by
re-export or clearance of unutilised or defective goods under rule 7
and

in the event of any failure, the Deputy Commissioner of Customs or,

as the case may be, Assistant Commissioner of Customs having

jurisdiction over the premises where the imported goods shall be put
to
use for manufacture of goods or for rendering output service shall
take
action by invoking the Bond to initiate the recovery proceedings of
the

amount equal to the difference between the duty leviable on such

goods but for the exemption and that already paid, if any, at the
time

of importation, along with interest, at the rate fixed by notification

issued under section 28AA of the Customs Act, for the period
starting

from the date of importation of the goods on which the exemption

was availed and ending with the date of actual payment of
the

entire amount of the difference of duty that he is liable to pay.

(2) Notwithstanding anything specified in these rules in relation to

removal and processing of imported goods for job work, the importer

shall be responsible for ensuring that the said goods are used in

accordance with the purposes provided in the exemption notification

and in the event of failure to do so, the Jurisdictional

Deputy Commissioner of Customs, or, as the case may be, the
Assistant
Commissioner of Customs having jurisdiction over the premises
where

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 INDIRECT TAXATION

the imported goods shall be put to use for manufacture of goods or

for

rendering output service, shall take action under these rules, without
prejudice to any other action which may be taken under the Act,
rules

or regulations made thereunder or under any other law for the time

being in force.

[Rule 8A] Penalty The importer or a job worker who contravenes any of the provisions of
these rules or abets such contravention, shall be liable to a penalty to
an

extent of the amount specified under clause (ii) of sub-section (2) of

section 158 of the Act without prejudice to any other action which may

be taken under the Act, rules or regulations made thereunder or under

any other law for the time being in force.‖

[Effective from 02.02.2021]

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CHAPTER 29 FOREIGN TRADE POLICY

Duration of Till 30.09.2021

Applicability

MEIS [M17,N17,M19] SEIS [N14,M16,RTP N19]

Merchandise Exports from India Scheme Service Exports from India Scheme

NOTE:- MEIS Scheme Withdrawn

Benefits under MEIS shall not be
available for exports made with

effects from 01.01.2021.

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