At time of import the following duties are levied:-
Basic Custom Duty(BCD)
Counterveiling Duty(CVD) u/s 3(1) of Custom Tariff Act1
Education Cess on CVD*(Notification No.14/2012/-Customs)
SHEC on CVD*(Notification No.14/2012/-Customs)
Education Cess on BCD
SHEC on BCD
Special Additional Duty(SAD)@4% u/s 3(5) of Custom Tariff Act2
1CVD is levied equivalent to the excise duty. This duty is leviable on Value of goods and BCD payable.
2SAD is levied equivalent to the VAT. This duty is leviable on Value of goods, BCD, CVD u/s 3(1) of Custom Tariff Act, Education Cess on BCD and SHEC on BCD.
*No credit of Education Cess and SHEC on imports after 17-3-2012 as that Cess is only of customs duty and not on CVD. (Notification No.14/2012/-Customs).
Buyer will be eligible to take credit of CVD u/s 3(1) of Custom Tariff Act and Special Additional Duty (SAD) @4% u/s 3(5) of Custom Tariff. CENVAT Credit of Special Additional Duty (SAD) @4% u/s 3(5) of Custom Tariff in respect of capital goods can be taken at 100% in the financial year in which Capital goods are received.
A provider of output service shall not be eligible to take credit of Special Additional Duty (SAD)@4% u/s 3(5) of Custom Tariff.
In short, credit of SAD can be utilized for payment of excise duty but not for paying service tax.
Example:-
Calculations of customs duty –
Calculation of customs duty payable is as follows –
|
|
Duty Rate % |
Amount |
Total Duty |
|
(A) Assessable Value Rs 10,000 |
|
10000.00 |
|
|
(B) Basic Customs Duty |
10 |
1000.00 |
1000.00 |
|
(C) Sub-Total for calculating CVD ‘(A+B)’ |
|
11000.00 |
|
|
(D) CVD @ 12% of ‘C’ |
12 |
1320.00 |
1320.00 |
|
(E) Edu Cess of customs – 2% of ‘B’ |
2 |
20.00 |
20.00 |
|
(F) SHEC of Customs – 1% of ‘B’ |
1 |
10.00 |
10.00 |
|
(G) Sub-total for SAD ‘C+D+E+F’ |
|
12350.00 |
|
|
(H) SAD – 4% of ‘H’ |
4 |
494.00 |
494.00 |
|
(I) Total Duty |
|
2844.00 |
|
Note – Buyer will be eligible to avail Cenvat Credit of D & H for Excise
Service Provider will be eligible to avail Cenvat Credit of D.
The Author of this article is Usha Garg.
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