Cvd refund

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HIMANSHU JOSHI (Querist)
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02 December 2013 Sir/Madam

For a manufacturing and Trading company who purchases import goods on which CVD & SAD is paid, can claim refund of CVD & SAD?

If yes then what's the procedure and please quote notification number or Section Number

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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06 December 2013 While Importing goods in India, the importer is required to pay Special Additional Duty (SAD). The rationale behind levying this import duty is to counterbalance VAT (i.e. tax revenues of government) and boost the domestic suppliers (which would have been purchased from domestic market otherwise). The SAD is levied as per Section 3(5) of Customs Tariff Act and also known as Counter Value Duty (CVD).

However, if the same goods are furthers sold out then refund can be available to importer to the extent of Special Additional Duty (SAD) paid. Here is an article to know the procedure and requirements of applying Special Additional Duty (SAD) refund.

Notification No. 102/2007-Customs, New Delhi, dated 14th September, 2007 - Exemption granted to Additional Customs duty on imported goods.

Conditions of the Refund:

(a) the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods;

(b) the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible; (Credit and refund is not available simultaneously)

(c) the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer;

(d) the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be;

Both intra-sale or inter-state sale is considered as subsequent sale and therefore payment of VAT/CST is eligible.

Procedure of refund:

A detail Circular 16/2008 dated dated 13/10/2008 has been issued outlining clarification on refund of 4% SAD in pursuance of Notification No.102/2007-Customs dated 14.09.2007.

(i) Time-limit for filing of refund claim: Up to a period of 1 year from the date of payment of duty. As stated in para 4.1 of the Circular No.6/2008-Customs dated 28th April, 2008, an amending notification to this effect specifically providing for 1 year period from the date of payment of the additional duty of customs (4% CVD) was issued vide Notification No.93/2008-Customs dated 1.8.2008 amending para 2(c) of the above-said notification. Unsold stocks would not be eligible for refunds.

As per Circular No.6/2008-Customs instructions are given to importer to file monthly claim irrespective of the number of bill of entries processed by the Commissioner.

Documents required for refund claim:

The list of documents required for any refund under Central Excise, Customs & Service Tax is available on http://www.cbec.gov.in. The same is reproduced here for easy reference to claim refund of SAD:

1. Document evidencing payment of the Special Additional Duty (SAD).
2. Invoices of sale of the imported goods in respect of which refund of the said SAD is claimed.
3. Documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods.
4. Certificate from a statutory auditor / CA who certifies the final accounts in respect of correlation of VAT payment, payment of 4% SAD amount and unjust enrichment as prescribed in Board’s circular No.6/2008-Customs dated 28.4.2008 and 16/2008-Customs dated 13.10.2008.
5. Copy of the Consignment Sale Agreement. (in case of sale through consignment agents / stockists).
6. Self-declaration / Affidavit (for e.g. in case of submission of invoice in soft form in lieu of paper documents, in case of fulfillment of the doctrine of unjust enrichment to the effect that the applicant has not passed on the incidence of 4% SAD to any other person).
7. Any other document considered necessary in support of the claim.

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