100% EOU, SAD 4% OR 2% CST, WHICH IS APPLICABLE IN DTA SALE.

[SANJAY SURYAWANSHI]

Sir,

In 100% EOU, DTA sale, if Customer has given 'C' form, in this case SAD 4% (As per Customs Tariff Act 1975,Sub Sec 5 of Sec.3) is applicable or 2% CST against 'C' is applicable.

As per Customs Tariff Act 1975, 3(5), which ever is higher is applicable.

Please Clarify.

[Arun Kumar Singh]

If you have sale the inputs as it is then all duty will be applicable same. If you have cleared the goods after manufacturing of final product then only Excise and vat will be applicable.

[Hikal Ltd]

CST 2% only applicable as SAD is exempt once Sales Tax is Payable...

[SANJAY SURYAWANSHI]

Sir,

Thanks for reply.

In this case SAD is not exempt. Question is SAD 4 % is applicable or 2% CST against Form 'C', is applicable?

Regards,

Sanjay V.S.

[Hikal Ltd]

If you are paying CST 2% with C Form, then no need to pay SAD 4%, If sales tax is exempt then you have to pay SAD, current case you are paying Sales Tax, which is not exempt. Hence you mat pay only CST.

[SANJAY SURYAWANSHI]

But Section 3(5) of The Customs Tariff Act 1975 say which is higher to be paid. In this case 4% SAD is higher than 2% CST against 'C' Form.

[Hikal Ltd]

Please refer case law - 2014 (2) TMI 922 - CESTAT MUMBAI

AI Summary

SAD versus CST applicability in EOU DTA sales: statutory higher levy principle may determine which tax applies.
Dispute over whether SAD or CST applies to DTA sales by a 100% EOU where the buyer furnishes a 'C' form. One view: CST paid under 'C' form obviates SAD liability and only CST is payable. Alternate view: the statutory higher levy principle permits charging SAD where it exceeds CST. The issue implicates the interaction of excise, VAT and customs levy rules and is the subject of cited administrative decision authority.