Duty on DTA clearances by EoUs : Level-playing field?
Duty on DTA clearances by EoUs
No doubt, duty paid for clearance of goods from EOU to DTA is EXCISE duty.
For computation of EXCISE duty, formula adopted, as per S.No. 2 of Column 4 of N/No. 23/2003 CE Dt.31/03/03. (i.e., ……“In excess of the amount equal to the aggregate duty of customs leviable on like goods….”. )
Which means, customs duty payable on like goods imported, is….
Assessable value = Rs.100
Basic customs duty @ 12.5Percent = Rs.12.5
Excise duty (CVD) @ 16Percent = Rs.18.00
Ed. Cess on CVD @ 2Percent = Rs.0.36 (1)
Total Customs Duty = Rs.30.86
Ed. Cess on total duty @ 2Percent = Rs.0.62(2)
Special Addl. Duty (Rs.100+ Rs.30.86=Rs. 130.86 x 4Percent) = Rs.05.23
Total customs duty is = 36.71 Percent
After the computation of aggregate duty of CUSTOMS, for arriving EXCISE duty payable on DTA sale, it is 36.71Percent.
If 36.71Percent is the EXCISE duty, why should the Dept. not demand Education Cess once again on total EXCISE duty leviable, as per Appendix IIA of of Sec. 93(1) of Finance(No.2) Act,2004, after availing the given exemptions, on N/No. 22/2003 C.E. 01/03/06, using following formula.
Assessable value = Rs.100
Basic customs duty 12.5Percent
25Percent of BCD (@ 3.125Percent) = Rs.3.125
Excise duty (CVD) @ 16Percent = Rs.16.50
Ed. Cess on CVD @ 2Percent = Rs.0.33(1)
Total Customs Duty = Rs.19.955
Ed. Cess on total customs duty @ 2Percent = Rs.0.39(2)
Special Addl. Duty (@ 4Percent) = N.A (exempted)
Total/aggregate CUSTOMS Duty (Rs.19.955+ Rs.0.39) =Rs.20.34
EXCISE duty arrived for DTA sale is = Rs.20.34
Ed. Cess payable on EXCISE duty is @2Percent = Rs.0.40 (3)
Therefore, duty payable on removal of goods to DTA is=20.75 Percent
(i) Is this a common practice all over India or is any other practice prevailing,
(ii) Is the assessee paying excess of Ed. Cess,
(iii) What is the amount should go to Education Cess A/c.
(iv) How can the DTA units avail full CENVAT credit of the CVD paid,
May I request dear netizens to put your opinion on it. Thanking you in advance.
vijay shettigar
18/03/2006
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