Do stpi unit have to reverse any custom duty on dta sale
Veerchandra B Shetty
(Querist) 26 April 2023
This query is : Resolved
I would like to know whether any Custom duty is to be reversed by STPI units for sale of software in DTA sale as EOU units have the liability of reversal of customs duty on duty free inputs used in the manufacture of products sold in local market.
As STPI units do not import any goods for manufacture of software are they still liable to reverse any part of Custom Duty on DTA sale ?
T. Kalaiselvan, Advocate
(Expert) 26 April 2023
The term DTA is normally used by the trade in exported goods, imported goods or locally procuring/manufacturing goods where in any kind of duty is involved.
Each EOU or STP unit has a Customs Bonded Ware house which is treated as Customs Bonded Area.
If you want to move goods in or out of the said ware house, permission from customs/excise is required. Such goods procured locally or imported attracts duty amount.
These units would have imported/procured such goods on the basis of export obligations with government. If a unit under EOU STP fulfilled such export obligation and achieved value addition, the authorities may permit the unit to sell dutiable goods to local market.
So once after completion of export obligation, EOU units or STP units sell dutiable goods to Domestic Tariff Area by obtaining permission from the customs/excise authorities.
The STP Scheme is a 100% export-oriented scheme for the development and export of computer software, including export of professional services using communication links or physical media. As a unique scheme, it focuses on one sector, i.e. computer software.
All the imports of Hardware & Software in the STP units are completely duty free, import of second-hand capital goods are also permitted.
Re-export of capital goods is also permitted.
Use of computer system for commercial training purposes is permissible subject to the condition that no computer terminals are installed outside the STP premises.
Sales in the Domestic Tariff Area (DTA) are permissible.
The capital goods purchased from the DTA are entitled for refund of GST.
