Import duty paid through DEPB Purchase - Credit allowed ?

Hi,

We are a manafcutrer and are importing some RM for which the Import duty (Customs, CVD &  Add Duty) comes to say 10,50,000/-.

we plan to purchase DEPB from the market (approx market rate 97.5%) for Rs. 10,00,000 and pay the duty from the said DEPB and balance cash.

As the import prodcut is our RM, can we claim Credit on the CVD and Add. Duty even though the same is paid through DEPB ?

Replies (4)

i guess no

as DEPB is issued with a disclaimer that goods are / to be manufactured without cenvat credit at any stage, so the input credit is not possible.

In my opinion, to take credit of payment and the mode of payment of duty is altogether different issue.

As far as DEPB lic is concerned, you have paid the duty to that exorter only, so your duty liability remains discharge with DEBP instead of Cash. However, when you have paid duty than you are eligible for credit.

You can go through M.F. (D.R.) Circular no. 22/2006-CUS, dated 13.10.2006.

Jay Hind

In my opinion, to take credit of payment and the mode of payment of duty is altogether different issue.

As far as DEPB lic is concerned, you have paid the duty to that exorter only, so your duty liability remains discharge with DEBP instead of Cash. However, when you have paid duty than you are eligible for credit.

You can go through M.F. (D.R.) Circular no. 22/2006-CUS, dated 13.10.2006.

Jay Hind

I agree with the opinion given by Mr. Himanshu.  You can also go through the following circular.

Circular No. 59/2004-Cus., dated 21-10-2004

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