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Circular No. 2 / 2004-Customs dated 8.1.2004
Sub:Admissibility of duty drawback to the supplies effected by DTA Units to
Special Economic Zones - reg.
Vide section 126 of the Finance Act,2002, Chapter XA was
proposed to be inserted into the Customs Act, 1962. This chapter details the
special provisions relating to Special Economic Zones. The proposed Section 76-A
under Chapter XA of the Customs Act provides that the Central Government may by
notification in the Official Gazette specify Special Economic Zones comprising
delineated areas where any goods admitted shall be regarded, in so far as duties
of Customs are concerned, as being outside the Customs Territory of India.
2. Section 76-I of the said Chapter XA provides that any goods admitted to
Special Economic Zone from the Domestic Tariff Area (DTA), shall be eligible for
drawback under Section 75, as if such goods are export goods. Accordingly, rule
2 (c) of the Customs and Central Excise Duties Drawback Rules, 1995, was amended
on 3.3.2003 to treat supplies made to the SEZ by the DTA units as physical
exports and making them eligible for duty drawback. Circular No.24/2003-Customs,
dated 1.4.2003, was issued for providing detailed guidelines in this regard.
3. It has, however, come to fore that Chapter XA of the Customs Act was supposed
to come into existence from a date to be notified. So far the said date has not
been notified. Consequently, these proposed provisions remain ineffective for
the time being. Accordingly, the amended provision of Duty Drawback Rules in
this regard too cannot take effect till such time.Hence, the instructions
contained in Circular No.24/2003-Customs, dated 1.4.2003, concerning payment of
duty drawback to the supplies from DTA Unit to the SEZ Unit, shall also become
operative from the date when Chapter XA of the Customs Act, 1962 comes into
effect.
4. Suitable public notices for information of the trade and standing orders for
guidance of the staff may kindly be issued accordingly.
5. The receipt of this Circular may kindly be acknowledged.
Yours faithfully,
(S.S. Renjhen)
Joint Secretary to the Government of India
F.No.602/2 /2002-DBK