Customs Edu Cess and SH.Ed Cess

[Mathurthi RamKumar]

Dear All,

Greetings. I am working at Kraft Paper manufacturing unit. We import paper machinery parts and paid Customs duty along with BCD + CVD+ customs edu cess and sh.ed.cess. I want to now cenvat credit availed CVD + customs edu cess and sh.ed.cess or only for CVD ?

Kindly help me in this regard.

Regards

M.RamKumar

[Rajagopalan Ranganathan]

Dear Shri. Ram Kumar,

Notification No.13/2012-CUS. (NT) dated 17.3.2012 and Notification No.14/2012-CUS. (NT) dated 17.3.2012exempts payment of education cess and secondary and Higher education cess payable on CVD leviable under Section 3 (1) of Customs Tariff Act. Therefore, you are eligible to take credit of CVD (which is levied at the rate of central excise duty leviable) on which no education cess and Secondary and Higher education cess is payable. The education cess and Secondary and Higher education cess is payable only on Basic Customs duty. Since Basic Customs Duty cannot be taken as credit under Cenvat Credit Rules, 2004, education cess and Secondary and Higher education cess payable on the Basic customs duty also cannot be taken as credit under Cenvat Credit Rules, 2004.

 

[Mathurthi RamKumar]

Dear Sir,

Thank you for valuable reply.

Regards

M.RamKumar

[Arti Gupta]

Dear Shri Rajagopalan Ranganathan,

I was going through your reply and the Notification No.13/2012-CUS. (NT) and Notification No.14/2012-CUS. (NT) are of date dt. 27-02-2012 and do not deal with the topic.Could you kindly mention the relevant notification in this regard.

[Rajagopalan Ranganathan]

Sir,

I am sorry that I have quoted the wrong Notifications. The Notifications are Notification No. 13/2012-Customs dated 17.3.2012 and 14/2012-Customs dated 17.3.2012. The error in quoting the correct Notification is regretted.

[Arti Gupta]

Dear Shri Rajagopalan Ranganathan,

You have quoted that "The education cess and Secondary and Higher education cess is payable only on Basic Customs duty."

However the "D.O. Letter from JS(TRU-I)" of Union Budget 2012-13 dated 16th march 2012 levies Edu. Cess and Secondary and Higher education cess on CVD also under the Sl. No. 19 i.e. Computation of Customs Duties.

As per my understanding earlier Edu. Cess and Secondary and Higher education cess were levied on the following:

1)Only on CVD and

2)On BCD+CVD

By the Notification No. 13/2012-Customs dated 17.3.2012 and 14/2012-Customs dated 17.3.2012 the Edu. Cess and Secondary and Higher education cess which was levied Only on CVD was removed.Now the CESS is levied once and that is on BCD+CVD value.

AI Summary

Cenvat Credit limited to CVD where education cesses are exempted; cesses on basic customs duty remain non creditable.
Importer paid BCD, CVD and education cesses and asked if CENVAT credit covers CVD and cesses. Notifications No.13/2012-Customs and No.14/2012-Customs (17.3.2012) exempt education cess and SHE cess on CVD, so CENVAT credit is available for CVD but education cess and SHE cess payable on Basic Customs Duty are not creditable under the Cenvat Credit Rules, 2004. A countercomment notes prior levy practices and that the 2012 notifications changed the incidence of cesses between CVD and BCD+CVD.