If the Duty Credit Scrip holder is unable to use the scrip for a valid purpose or within the validity period, it can be transferred to any other party in the open market. However, such scrips are sold and purchased at a discount to their face value. These scrips can be sold directly to the other party or even through an agent who helps you to get in contact with the willing buyer.
Here’s an example to simplify the concept.
For instance, a duty credit scrip has a value of Rs 20 lakh, the holder can utilize the scrip to make the payment of duties or taxes equivalent to Rs. 20 lakh. But if the holder of the duty credit scrip doesn’t intend to use it, they may sell it to another willing party.
Now, the buyer of the scrip won’t be paying the same face value for these scrips, i.e, Rs. 20 lakh. He will buy the scrip at a discount. Thus, instead of Rs. 20 lakh, the buyer may purchase the scrip for Rs.19,50,000.
Also, the new holder had bought the scrip for Rs.19,50,000, but the scrip will still be worth Rs. 20 lakh and can be conveniently utilized for paying duties or taxes equivalent to the amount.
Thus, the buyer gets a benefit of a certain amount that has been saved through a discount. The seller also saves his Rs. 19,50,500 which would have been wasted if not used before the validation period.