Temporary Removal-SEZ Procedure

7/21/2019 Temporary Removal-SEZ Procedure

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Covidien Engineering Services Pvt Ltd Temporary Removal-SEZ procedure May 2012

A SEZ unit is allowed to remove goods out of SEZ on payment of customs duty. However, a

unit is exempt from payment of duty provided the goods are brought back to the SEZ

premises within 120 days from its removal. The provisions of Rule 50 & 51 of the SEZ Rules,

2006 deals with removal of goods to DTA without payment of duty.

The various purposes for which goods can be removed from SEZ as defined in Rule 50 of SEZ

Rules are listed below:

1. Repairs;

2.

Display, export promotion, exhibition;

3. Job work, test, repair or replacement, refining and calibration, quality testing and

research, development;

4. Laptop or notebook computers or video projections systems for use by authorized

employees of the unit;

5. Quality testing or research and development to any recognized laboratory or

institution.

The ensuing paragraphs dwell with various scenarios in relation to removal of goods from

SEZ unit to a Domestic Tariff Area (DTA unit).

1. Scenario 1: Goods are received back within 120 days

1.1 The goods removed out of SEZ premises and brought back within 120 days will be

regarded as temporary removals. The procedure and records to be maintained for

temporary removal of goods are listed below:

a. Intimation to Specified Officer (i.e. Assistant/Deputy Commissioner of

Customs in SEZ) on purpose of transfer of goods to a DTA unit. (Format

Enclosed)

b. Maintenance of record for movement of goods. (Format enclosed as

Annexure-1)





c.

Challans: The goods have to be removed by SEZ unit under a cover of

challan. (Format enclosed as Annexure-2)

The challan has to be serially numbered;

Identification marks such as make & model, serial number and

specification of goods are required to be present on the challan;

To be authenticated by the Managing director or Company Secretary or

any other person duly authorized in this behalf by the Company.

d. The serial numbers of the challans has to be intimated to the authorized

officer (i.e. customs officer in SEZ) before using the Challans.

e. The Challan has to be signed by the authorized officer at the time of

removal of goods from SEZ unit.

f. An undertaking to be filed with the authorized officer for the return of

goods provided the goods are sent to any recognized laboratory or institution

for quality testing or research and development purposes.

1.2 Conditions:

To avail the exemption from payment of customs duty the following conditions are

required to be fulfilled by the SEZ unit:

The goods have to be received within 120 days from the date of removal of

goods from the SEZ unit.

On receipt of goods into the SEZ unit the identification marks should match

with those mentioned on the challans at the time of taking out of goods

into DTA unit.





2.

Scenario 2: Goods are received beyond 120 days

2.1 A SEZ unit will be liable to pay customs duty if the goods so removed are not

received back within 120 days from its removal. Therefore, if the goods are

removed from SEZ unit for a period beyond 120 days, it will be regarded as sale.

2.2 SEZ unit will be liable to pay duty upon completion of 120 days.

3. Scenario 3: Consumption/destruction of goods in DTA unit:

3.1 In case where the goods sent, to any recognized laboratory or institution for the

purpose of testing or research or development, are consumed or destroyed during

such process, a certificate to this effect from such institution is required to be

submitted by the SEZ unit, to the Specified Officer.

3.2 In the absence of the above certificate the removal of goods by SEZ unit will be

regarded as beyond 120 days and will be liable to Customs duty.

4. Scenario 4: Consumption/destruction of goods in SEZ unit:

4.1 Intimation is required to be filed with the Specified Officer on

consumption/destruction of goods within SEZ unit.

4.2 Rule 39 of SEZ Rules, provides that intimation for not less than seven days before

the goods are destroyed in SEZ has to be filed with the Specified Officer.

4.3 No format has been prescribed for filing intimation; therefore an application on

Company Letter-head may be filed in this regard.

5. Value Addition:

5.1 As per section 30 of SEZ Act, 2005 SEZ unit can clear the goods in DTA on payment

of Customs duties levied under section 12 of the Customs Act, 1962. The duty

payable is equal to the duty of Customs leviable on like goods when imported into

India. Further, the rate of duty and tariff valuation applicable to goods removed





from SEZ are at the rate and tariff valuation in force as on date of removal of goods

and where such date is not ascertainable, as on the date of payment of duty.

5.2 Valuation and assessment of the goods cleared in DTA would be made in accordance

with Customs Act and the Rules made there under. Therefore, any value addition

made to the goods after its import in SEZ will also be considered for assessment of

goods.

5.3 The goods so removed to DTA unit for further processing and brought back to SEZ

within 120 days will be liable to duty if the identification marks do not match with

those mentioned on the challans at the time of taking out of goods into DTA unit.

Therefore, any value addition made in DTA unit will lead to payment of duty

provided the classification (CTH) of goods or description of goods is changed.

6. Bill of Entry:

6.1 The DTA Unit intending to buy goods from SEZ is required to file Bill of Entry for

‘Home Consumption’ giving therein complete description of goods, make and model

number and serial number and specification along with invoice and packing list. The

Bill of Entry is to be filed with the authorized officer.

6.2 The Bill of Entry may also be filed by the SEZ units on the basis of authorization

from the DTA buyer. The assessment and valuation of goods would be as per

provision of Customs Act and Rules made thereunder.

In this scenario the BoE has to be filed manually by the SEZ unit.





7.

Summary

Scenario

Within 120

days

Beyond 120

days

Consumption/

destruction of goods

Outside SEZ* Within SEZ

1 2 3 4

Challan Required Required Required Not Required

Intimation with SO Required Required Required Required

Maintenance of

RecordsRequired Required Required Not Required

Applicability of Duty No Yes Yes No

Filing of Bill of Entry NA Buyer SEZ NA

Duty liability NA Buyer SEZ NA

*Not applicable if a certificate from recognized institution is filed with Specified Officer.

*****

Documents

Temporary Removal-SEZ Procedure