4% sad refund is compulsory

[Mukund Thakkar]

Dear Expert,

one of my client is traders, he is importing the goods and doing the trading activity. during the time of import he has paying 4% sad, and claim the refund. now my question is it is compulsory to file sad refund claim or pass the 4% sad to his buyer? if he is sales purchaser can availed the 4% cenvat credit.? because getting the refund of 4% procedure is very time consuming.please sending me any clarification in this regards with your expert view.

[Mahir S]

There are only 2 options available for a trader. Either to pass the 4% to the buyer or to claim refund. There are no any third option available.

However, if proper documents as provided under para 2 of the Notification No. 102/2007-Customs dated 14^th September, 2007 are submitted to the satisfaction of the department, then refund shall be sanctioned.

There has been cases of misuse by the traders, hence same has to be properly verified before sanction of refund.

[Madhukar N Hiregange]

You have the option to go for refund or not. If you can pass on the credit as you supply to manufacturers then both CVD + SAD can be passed on and customer would be advantaged.

If supplying to traders- SAD would become a cost, therefore for such sales ONLY refund can be applied.

Both options are available.

AI Summary

SAD refund or pass-on: traders must either claim refund with required documentation or transfer duty to buyers. Traders who pay SAD at import must either claim a refund with prescribed documentation subject to departmental verification or pass the duty to buyers; supplies to manufacturers allow passing duty and enabling Cenvat Credit, while supplies to traders generally render SAD a cost recoverable primarily through refund.