Policy Circular No. 25/97-98 Dated: 17.11.1997

Regularisation of cases of default in fulfilment of exportobligation- Recovery of customs duty with 24% interest

Subject:- Clarification Requested-Para 7.28 of Handbook of Procedures 1997 -2002 (Vol. 1) - Regularisation of bonafide default.

Sir,

Attention is invited to Para 7.28 of Handbook of Procedures (Vol.1) 1997-2002 wherein the Procedures to be followed in the cases of a bonafide default in fulfilment of export obligation for regularisation are laid down. -

2. Wool and Woollens Export Promotion Council have sought a clarification on calculation of rate of interest, that is, whether simple or compound interest is payable in terms of Para 7.28 of Handbook of Procedures (Vol.1) 1997-2002 for purposes of regularisation of cases of bonafide default in fulfilment of export obligation as the recovery of customs duty with 24% interest on unutilised exempt materials does not specifically refer to either simple or compound interest.

3. The matter has been examined in consultation with Department of Revenue. It is clarified that the 24% rate of interest referred to in Para 7.28 of Handbook of Procedures 1997- 2002 (VoI1) is to be taken as simple rate of Interest.

This issues with the approval of DGFT

Sd/-
(L B Singhal)
Dy Director General of Foreign Trade

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