Charged proportionately

[paresh zatakia]

A trader importer (regd under excise) imports goods in bulk say 5 m.t. sales to 5 customers 1 mt each.Whatever CVD he pays ,he proportionately charges to his Customers ,is it o.k.?

[Surender Gupta]

Thechnically and practically the importer has to pass the incidence of CVD proportionate to quantity in favour of buyers irresptective of the value at which such goods are sold.

[Madhukar N Hiregange]

If he is registered under central excise he can issue an invoice under Rule 11 for 1 tonnes each to 5 people. He should ensure that he does not pass on duty credit more than he has paid to the extent of Addtional Duty of Customs( popularly called CVD) and the special CVD of 4%.

[Guest]

What you say is allright as per law. However, you have to register with CENVAT as an importer (primary first stage dealer) to be able to issue CENVAT Invoice and you can pass on CVD quantity to quantity. However only a manufacturer gets the final CENVAT credit of CVD. therefore you have to issue the invoice and CVD direct to manufacturer and not to another trader. Normally if you pass on Rs.100 CVD to Manufacturer he will consider an increase in your price by only about Rs.40-60 as he has an input output norm to follow while claiming CENVAT credit on the CVD.

AI Summary

Importer Guidance on Charging CVD Proportionately for Smaller Quantities Under Rule 11; Registration as Dealer Required A trader importer, registered under excise, inquires about proportionately charging CVD to customers when selling imported goods in smaller quantities. Responses clarify that the importer should pass the CVD incidence proportionately to buyers based on quantity, not value. If registered under central excise, invoices can be issued under Rule 11 for each sale. The importer must ensure not to exceed the duty credit paid, including the additional and special CVD. To issue CENVAT invoices, registration as a primary first stage dealer is necessary, and CVD should be passed directly to manufacturers, who can claim the CENVAT credit.