What is Amnesty scheme?
An amnesty scheme is a program initiated by a government or other authority to grant a pardon or forgiveness to individuals or groups who have committed certain offenses, usually related to tax or financial matters. The scheme typically involves a limited period during which those who qualify can come forward and declare any previously undisclosed assets or income, pay any outstanding taxes or penalties, and avoid prosecution or other legal action. The goal of an amnesty scheme is to encourage compliance with tax and other laws and to help raise revenue for the government.
Who can apply for the Amnesty Scheme?
DGFT launches the Amnesty scheme dated 1st of April 2023 in Public Notice No. 2/2023 for one-time settlement of defaults in export obligation by Advance Authorization Scheme & EPCG Scheme Holders. There is the coverage of the scheme as per the followings:-
- The Authorizations issued under AAS & EPCG for all variants issued under the foreign trade policy of 2009-14 till the date 31.03.2015 are covered under this scheme.
- For the Authorizations issued under AAS & EPCG issued under the FTP of 2004-09 and before, the coverage is limited to those authorizations where the “Export Obligations Period (original or extended) was valid beyond the date 12.08.2013” are covered under this scheme.
Details of the Amnesty Scheme
As per the Scheme all the pending cases of the default in meeting of Export Obligation (EO) of authorizations can be regularized by the authorization holder on payment of all customs duties that were exempted in proportion to unfulfilled Export obligation and interest at the rate of 100% of such duties exempted.
However, no interest is payable on the portion of Additional customs duty and special additional customs duty.
- If the Entire Authorization is in default: The applicant has to pay the customs duty including interest with their concerned Jurisdictional Customs Authorities and submit their proof to concerned Regional Authority of DGFT.
- If the Partial Authorization is in default: The applicant can request to the Regional Authority of DGFT based on application filed for export obligation discharge certificate along with their supporting documents. After that the applicant will be intimated regarding the details of default on which customs duty and interest is payable.
Further, after examining the due payments of the applicant, the Regional Authority shall issue the Export Obligation Discharge Certificate (EODC).
Procedure for Regularizations of cases where the cases are adjudicated or pending for adjudication originally or in appeal:
- Cases which have been adjudicated or pending for adjudication and appeal has not been filed: The firms will produce a copy of the closure letter from the concerned Regional Authority to their Adjudicating Authority.
- Cases where appeal has been filed: Then the closure letter will have to be submitted to the Appellate Authority and after the submission of such closure letter to the Adjudicating/Appellate Authority will decide on closure of such case/appeal and the same will be intimate to the appellant and their Regional Authority.
Some other important key points:
- Cases under investigation or adjudicated for involving fraud, misdeclaration or unauthorized diversion of material or capital goods will be excluded from the coverage.
- Neither CENVAT credit not refund under any provision of law of any amount shall be allowed on duties paid under the amnesty scheme.
- The applicant shall also give an undertaking that they will not file any application for CENVAT credit or refund of any duty paid under the scheme before any authority or before any court.
- If the applicant deposited their custom duty along with their applicable interest in full then the case would not be eligible for coverage under this scheme.
Example for understanding the Amnesty Scheme:
- Where Entire EO could not be fulfilled:
|A||Value of Exempted Goods||INR 1000|
|B||Total Duty ( Including Additional Customs Duty & Special Additional Customs Duty ) which was originally Exempted on the Imported Item on account of the AA/ EPCG||INR 500|
|C||Additional Customs Duty & Special Additional Custom Duty||INR 180|
|D||Total Custom Duty except for the Additional Customs Duty & Special Additional Customs Duty ( B -C)||INR 320|
|E||Maximum Interest which is payable under the scheme is Due (100% on Total custom duty except for Additional Customs Duty & Special Additional Customs Duty) (100% of D)||INR 320|
|F||Total Duty Exempted at the time of import + Interest ( B+E)||INR 820|
- Where there is a shortfall in EO fulfillment:
|SI. No.||Particulars||Amount (INR)|
|A||Value of Import Authorization||INR 5,000|
|B||Default in Export Obligation in %||40%|
|C||Import Value of Default @40% of value of Import Authorization||INR 2,000|
|D||Total Duty ( Including Additional Customs Duty & Special Additional Customs Duty ) which was originally Exempted on the Imported Item on account of the AA/ EPCG||INR 1,000|
|E||Additional Customs Duty & Special Additional Custom Duty||INR 360|
|F||Total Custom Duty except the Additional Customs Duty & Special Additional Customs Duty (D-E=F)||INR 640|
|G||Maximum Interest which is payable under the scheme is Due (100% on Total custom duty except Additional Customs Duty & Special Additional Customs Duty) (100% of F)||INR 640|
|H||Total Duty Exempted at the time of import + Interest (D+G=H)||INR 1,640|
Note: Any Authorization Holder willingly to avail this benefit then the applicant must complete the process of registration on https://www.dgft.gov.in or on or before 30.06.2023 and pay the customs duty along with interest upto 30.09.2023.
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