Customs Educational Cess - Cenvat credit

[Laxmaiah Vanamamula]

Dear sir,

we have received Import Material from LG Chem ,

in Customs ( Duplicate (Importer copy)

BCD  >  264637.80

CVD >  666887.20

Customs EDucational Cess >  18630.50

Cutoms sec& H.Edu.Cess    >  9315.20

we are eligible to take  Cenvat Credit  above Edu.Cess  &  Sec.Cess  ?

Please clarify it,

Thanking you ,

From,

V.Laxmaiah,Sudhakar Pipes 

[rakshit verma]

Dear Laxmaih

Vide notification No. 13 & 14 of Customs, 2012, 2% & 1% education cess levied under CVD has been exempted, and underrule 3(1) of the Cenvat Credit Rule, 2004, credit was admissible on it, not on Customs cess which was/is also levied. Hence no cenvat on cess of CVD is allowabale as it is not being charged.

regards

 R C VERMA

09810525780

[NK SHETE]

Dear V.Laxmaiah

 

I do agree with R C VERMA. In the recent budget, cesses leviable on the CVD portion of customs duty is being exempted. The cess paid on CVD was cenvattable and not Customs Cess.

we are not eligible to take cenvat credit on customs ED & SH cess

 

thanks

srinivas

Dear Verma Sir,

I agree that we can't take cenvat credit on cess on custom duty. But what about the Edu Cess & H.Ed. Cess amount of CVD which is included in Customs Edu Cess of Rs. 1333.74(2 percent of 666887.20) & H.E.Cess of Rs.666.87 (1 percent of 666887.20). The above amount Rs.18630.50 & 9315.20 is calculated on both BCD & CVD figures. Kindly clarify.

Regards,

Sadashiv Joshi

[SHIVKUMAR SHARMA]

Dear Mr.Vanamamula

I do agree with all our experts opinion & are not eligible to take cenvat credit of  customs Education cess & Higher education cess.

SHIVKUMAR SHARMA

[B Ravi]

Dear All,

I see most of the reply given here about non entitlement of credit but is it the intent of the legislation to charge cess on CVD as custom CESS and not allow credit for the same. I do not think so. Most of the people are taking this literal interpretation and foregoing this benefit without exploring the possibility if there are any other interpretation possible which is more logical. Any suggestion/view are most welcome in this regards.

[sanjay gupta]

Dear All

In my  Opinion since  we can take credit on cess on CVD portion.

Thanks

Sanjay Gupta  

[Gopal Rathi]

Sir,

Credit in respect of Ed. Cess & S&H Cess of customs duty is not eligible by virtue of rule 3 of CCR.

Moreover, your example with logical query; here your say is Customs cess is inclusive on the (Customs duty+CVD)

However, it is the way Cess on customs is imposed, if you go back to a scenario prior to 2012 (i.e. Cess on CVD not being exempt) here also, the Calculation of customs duty were : (Customs duty+CVD+Cess on CVD+Cess on Customs duty) here also the total duties were considered (including cvd & cess thereof) for calculating Cess of Customs...

AI Summary

Cenvat credit admissibility: customs education and higher education cess charged as customs cess are not creditable under existing rules.
Cenvat credit is not available for education cess and secondary & higher education cess charged as customs cess by virtue of Rule 3 of the Cenvat Credit Rules; although cess on the countervailing duty component had been cenvatable previously, notifications exempting those cesses on CVD removed the levy and thus the basis for credit.