CBIC issues Clarification regarding bank guarantee requirement for bond executed by EOUs

Aug 16, 2018 | by Avantis RegTech Legal Research Team


Various representations have been received regarding difficulties faced by EOUs with respect to requirements of bank guarantees in view of Circular no. 48/2017- Customs dated December 08, 2017 issued by the Central Board of Indirect Taxes and Customs (CBIC).

The clarification issued vide Circular no. 48/2017-Customs dated December 08, 2017 is with respect to Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 notified vide Notification no. 68/2017-Customs (NT) dated June 30, 2017. Vide the said Circular, various norms have been prescribed with respect to requirement of bank guarantee/ cash security/ surety for various categories of importers which is required to be furnished for the bond to be executed as per Rule 5(2) Customs (import of goods at concessional rate of duty) Rules, 2017. No specific reference has been made to EOUs in these norms.

The confusion is arising on account of the requirement of EOUs to follow Rule 5 of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 to be eligible for claiming exemption of duties/ taxes on the import of goods under Notification no. 52/2003 dated March 31, 2003. As the EOUs have already been executing B-17 bond, hence it was clarified vide Circular no. 29/2017-Customs dated July 17, 2017 that the said B-17 bond will serve the requirement of continuity bond as required under Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 and there is no requirement to submit a separate continuity bond by EOUs. As B-17 bond is serving the purpose of continuity bond for EOUs, hence various circulars issued by the Board extending the facility of exemption from furnishing bank guarantee/ surety by EOUs namely Circular no. 54/2004-Customs dated October 13, 2004 and Circular no. 36/2011- Customs dated August 12, 2011 will continue to hold good, as these circulars are in line with the Para 6.12 of the Foreign Trade Policy which lays down the conditions for EOUs to be exempted from furnishing of bank guarantee.

In view of above, it is reiterated that waiver of bank guarantee/ surety to EOUs would continue to be governed by various circular issued from time to time by CBIC with regard to B-17 bonds executed by EOUs and will not be guided by the Circular no. 48/2017-Customs dated December 08, 2017 which governs the general importers and not the EOUs.

[Circular No. 27/2018-Customs]

URL: http://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2018/circ27-2018cs.pdf;jsessionid=0FC064CFBED37795E13CC7B4039CFD01


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