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Only one cess on imported goods – What about goods cleared by 100% EOUs?

By TIOL News Service

NEW DELHI, MAR 16, 2012: ON the goods imported, the importers are required to pay education cesses on CVD and again on total Customs duties. In this budget, separate notifications have been issued vide Notification No. 13/2012 and 14 /2012-Customs dated 17.3.2012 to exempt the Education Cess and Secondary Education cess leviable under sub-section (1) of Section 3 of the Customs Tariff Act, 1975. The effect of these Notifications is that the imported goods will attract Cess only once on the total customs duty payable. Thus, payment of cess two times on the imported goods has been done away with. The illustration is as under:

llustration:

Present

Proposed

A

Assessable value (CIF + Landing Charges)

100

100

B

Basic customs duty (BCD) 10%

10.00

10.00

C

Value for CVD (A+B)

110.00

110.00

D

CVD equivalent to central excise duty 10%

11.00

11.00

E

Educational Cess on CVD 2%

0.22

0

F

Sec. and Higher Educational Cess 1%

0.11

0

G

Customs duty for calculation of Cess

21.33

21

H

Customs Educational cess 2%

0.43

0.42

I

Customs Secondary and higher educational cess 1%

0.21

0.21

J

Value for SAD

121.97

121.64

K

SAD @ 4%

4.88

4.865

Total Duty

26.85

26.495

But what about the Education Cess payable by the EOUs on clearances made in DTA? Once? Twice or thrice?


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: workings for dta clearances

DTA Clearances would be as below?

Basic = 36000
BCD 3.75% = 1350
CVD 12% = 4482
Customs E Cess 2% = 116.64
Customs SHE Cess 1% = 58.32
CST 2% = 840.14
Invoice TOtal = 42847.10
Whether Cenvat Credit could be taken on Customs E Cess and Customs She Cess?
Whether Third Time CEss is now become payable?


Posted by Swaminathan s
 
Sub: Only one cess on DTA clearance by EOU

The proviso to Section 3(1) mandates that excise duty payable on excisable goods manufactured in 100% EOU and cleared in DTA will be equal to aggregate of duties of Customs which would be leviable under the Customs Act, 1962, or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India.

In other words, proviso to Section 3(1) of the Central Excise Act, 1944 treats the goods manufactured and cleared from an EOU to DTA units at par with imported goods for purpose of determining the question of duty. Therefore, by virtue of this fiction, one has to forget that the goods under assessment are manufactured in India and thereafter compute the amount of duties payable by EOU on the basis that goods are imported into India.

Posted by Yogesh Guna
 
Sub: Credit of Cess

Be that as it may. What would be the eligible credit of cess paid on goods imported after 16.3.2012 that is after the revised calculation of duty for assessment? Can we expect another clarification or amendment in CCR, 2004?



Posted by rajavelcalaimany rajavelcalaimany
 
Sub: Still 2 times Education Cess Payable on DTA sale by EOUs

As the dispute on 3 times Education Cess payable on DTA sale by EOUs is not settled, EOUs stil have to pay 2 times Education Cess considering the exemption given on Education Cess payable on CVD, in this budget.

This is my image of duties payable on DTA sale by EOUs, meanwhile I request for the opinion of experts.


click here to see the table


Posted by vijay shettigar
 
Sub: NO CESS ON IMPORTEDGOODS

Notification No.13/2012 -Cus and 14/2012-Cus exempts 2% E.cess levied under Section 93 and 94 of the Finance Act 2004 (CVD Cess as well as Cess on aggregate of customs duties) and 1% S.H.E Cess levied under Section 138 and 139 of the Finance Act 2007(CVD Cess as well as Cess on aggregate of customs duties). It seems CBEC has exempted both CVD Cess and Customs duty cess.An unintended mistake in drafting the notification? No cess at all on imported goods? Another amendment is to be expected?

Posted by rajavelcalaimany rajavelcalaimany
 

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