Exporting to Nepal, export benefits available ,special procedures for exporting to Nepal and relevant notifications

Global Tax Guru detailed opinion on how to proceed on  export sale of DG set to one customer situated at Nepal   are:-

Brief facts -

       1.The customer is ready to pay in Foreign Currency i.e. U.S. Dollar. The DG sets are procured from  India.

2. You are a merchant exporter.These goods are manufactured by your principal in India.

Export benefits-

1. If you have already availed CENVAT credit against these goods ,there is no question of refund of Excise duty from Custom Authority or Excise Authority Bangalore.
   
   
2. If these goods are imported from third countries and same are exported to Nepal then there is no drawback  payable to you as per Notification No.13/2011-Customs (N.T.) dated 24.02.2011
   
   
3. DG sets are capital goods as they fall under Chapter 85 of Customs Tariff Act and export of same to Nepal are noteligible for drawback as per notification (amended) No.208/1977-Customs, dated the 1^st October, 1977.
   
   
   4.if Export of DG sets falls under following circumstances of supply then , drawback of 2% of FOB value is admissible :
   
   
   (a) If goods are exported against an irrevocable letter of credit in freely
   convertible currency;
   
   
   (b) If goods are exported for supplies to projects financed by any UN
   Agency or IBRD Association or ADB or any other multilateral agency of
   the like nature and for which payments are received in freely
   convertible currency; and
   
   
   (c) If the specified capital goods are supplied against any global tender
   invited by HMG of Nepal for which payment is received in Indian
   Rupees. These goods can be exported only from Jogbani or Raxaul
   LCS on production of bank certifies of receipt of the payment in freely
   convertible currency or Indian Rupees, as the case may be .( Notification No.45-Cus., dated 13-2-1963 & Notification No. 208/77-Customs, dated the 1^st October, 1977)
   
   
   
   

   Special procedure to export to Nepal-

   
   
    Detailed procedures with reference to Customs Manual 2011 and
   relevant notifications are attached for your guidance and reference.
   
   
   You are not eligible for drawback or refund of duty for export of DG sets to Nepal. However, there is   drawback of  2 % of FOB on DG sets ,if you satisfy notification conditions  for supply as discussed at point 4(supra).