Refund

Repayment of Duty, On import or export of goods, at times duty may be paid in excess of what was actually liveable Constitution of India does not permit the Government to retain, even a rupee more than what is authorised by Parliament, as revenue. Thus, wherever any duty has been collected, it has to be refunded, but such a refund cannot be granted unless certain procedures are followed.

Refunds in customs:

Section 27 of the Customs Act, 1962 deals with the refund of duty and interest, Paid by or borne by a person.

• (1A) the application has to be made in duplicate in the form as prescribed in the Customs Refund Application (Form) Regulations, 1995, to the jurisdictional Deputy/Assistant Commissioner of Customs.
• 1B) the period of limitation of one year
  (2) The Assistant Commissioner of Customs or Deputy Commissioner shall make refund order if criteria satisfied.

In case the application is found to be incomplete, the Customs has to return the application to the applicant, pointing out the deficiency. The applicant has to re-submit the application after making good the deficiency, for scrutiny by Customs again for admissibility of the refund claim. Where on scrutiny, the application is found to be complete in all respects; the Customs issues an acknowledgement in the prescribed Form as per the Customs Refund Application (Form) Regulations, 1995.

CAUSES FOR REFUND/ CLAIM OF REFUND

ASSESSMENT
(a) Classification of goods.
(b) Invoice price.
(c) Freight, insurance, additions.
(d) Landing charges.
(e) Discounts / Commission.
(f) Preference for country of origin/ Exemptions
(g) Mistakes of calculations / excess recovery

SHORTAGES
(h) Short-landings,
(i ) Short shipments.
(J ) Shortages - Damages - Loss - Pilferages – Destruction.
(k) Not Landed

DUTY PAID TWICE MISTAKENLY
( l )  Double duty
(m) Double noting (very rare).

PROVISIONAL ASSESSMENT
(Sec. 18).

DEPOSITS
(n) Deposit of duty (Sec. 49).
(o) Security deposits, ITC surety.

OTHER REASONS
(p) Interest and rent on warehoused goods, etc.
(q) Interest on duty.

DOCUMENTS FOR REFUND CLAIM
For each type of refund claim, the essential documents required are:

REFUND APPLICATION PART - A , as per Customs Refund Regulation 1995 para2(1)

• Worksheet, Diff of amount payable and paid.
• Invoice and Packing list. (pre-shipment documents)
• Triplicate copy of B/E (Final/ Reassessed copy.)
• Catalogue or literature or COO
• Authority Letter, Duty deposit Challan
• Covering Letter

IN SPECIAL CASES OF REFUND

• Short landing, non-delivery,
• LandingRemark'sCertificates
• From the port authorities Custodian,
• Customs examination report,
• Survey report, etc.
• Any other evidence that supports the claim.

ORDER OR DECREE

• Any order or Decree
• Order of the appellate authority,
• Tribunal or any court

DUTY NOT RECOVERED

• Declaration for Duty not recovered
• Balance sheet showing the amount claimed for
• Refund as receivable from the Customs.
• CA Certificate
• Certificate of Cenvat Credit: If the importer is regd. With Excise In case of trader Sales Invoice



DEFN. OF UNJUST-ENRICHMENT:
As Indirect tax is a tax levied on other than a person and the burden of this tax can be shifted to others.

The Doctrine of Unjust enrichment is accepted in India.Which means that no one can claim the benefit twice. One cannot keep something that is not due for him.

Case Law unjust enrichment:
Hon’ble Supreme Court in the case of Sahkari Khand Udyog Vs Collector of Central Excise 2005(181) ELT 328 (SC) on the issue of unjust enrichment, all the refund claims have to be studied from the point of view whether the provisions of unjust enrichment get attracted. Further, SECTION 28C. Price of goods to indicate the amount of duty paid thereon. - &SECTION 28D Presumption. That incidence of duty has been passed on to the buyer.

SAD

WHAT?

Section 27 of the Customs Act, 1962 deals with the refund of duty and interest, Paid by or borne by a person.

WHY?

This duty is to countervail sales tax leviable on the sale of goods in India to give level playing field to domestic industry.

HOW?

• Exemption granted to 4% Special Additional Custom Duty on Imported Goods under CUS NTF No 102/2007 Date 14/09/2007
• CIR 06/2008 Procedure to be adopted for refund
   • CIR 16/08 Clarification on refund
   • Set A (Purchase Documents) [Cus . Not No 102 Para 2(a)]
   • Set B (Sales Documents) [Cus. Not No 102 Para 2(b)]
  

Original Triplicate Sales Invoices- With the Exact Description & HS Code as in Bill of Entry with the stamp stating:-
“No Credit of the said Additional duty of Customs Leviable under Section 3(5) of the Customs Tariff Act 1975 shall be admissible.”

VAT/ CST Challans& Return Copy – (Attested by CA). [Cus Not No 102 Para 2(d)]

Set C Application to be filed (As per Various custom Houses) [Cus Not No 102 Para 2(c)]

Duty Not Recovered

HAVE YOU CONSIDERED THE FOLLOWING POINTS

Whether the sales are within 12 months from the BOE date.

• Whether the 1st sale is after the Out of Charge date & time.
• Whether the last sale is within One Year from the duty payment date

EXTRA DUTY DEPOSIT (EDD) OR REVENUE DEPOSIT (RD) INTRODUCTION OF EDD--Circular No. 11/2001-Cus.dated 23-2-2001

Edd refund is the refund arising out of the deposit @ 1% paid by the importer who is in relation with the foreign supplier and after the svb order is finalised the importer can get the refund of this deposit by submitting the provisionally assessed boe for final assessment and request for the closure of the provisional duty bond. Since the circular no. 5/2016 dated 09.02.2016 there is no need to submit the acceptance letter from review dept.

FOR CANCELLATION OF PD BOND YOU NEED TO HAVE THE COMPLETE DETAILS/ ENTRIES OF ALL THE BILLS OF ENTRIES DEBITED AGAINST THE BOND. THE DETAILS ARE TO BE SUBMITTED IN THE GROUP AND AFTER THE VERIFICATION BY THE GROUP WILL BE FORWARDED TO THE BOND SECTION FOR THE CLOSURE OF THE SAME.

• Chapter -V Levy of, and Exemption from, Customs Duties
• Chapter- VA Indicating amount of duty in the price of goods, etc., for purpose of refund
• Customs Refund Application (Form) Regulations, 1995