IF BCD paid thru licence

[Mridul Sethi]

Sir,

If we pay BCD thru licence, then AED is to be calculated on landed cost or on (landed cost + custom duty) figure. Actually we are receiving BOE ot this case with the calculation of AED on landed cost, but my query is that in this way are we not paying less amount to the govt.

Regards,

Mridul Sethi

[YAGAY andSUN]

If you had paid BCD through licence then it means that customs duty is exempted to that extent.  And if customs duty is exempted then CVD will not will calculated on the exempted part of the BCD.

[kamal chordia]

AED Calulate on landed cost +Basic Custom Duty in all cases weather you paying duty through cash or through licence

[Radha Arun]

AED is always calculated on landed cost plus customs duty, under section 3(2) of the Customs Tariff Act. However, in the case of licence, the basic duty is actually exempted. Licence debit is only a way of keeping track of how much exemption is availed, as against the face value of the licence. So, there is no basic customs duty while calculating AED. (The AED is also exempted. Again, the licence debit is a way of keeping track of the exemption.)

AI Summary

Calculation of AED: exclude licence exempt basic customs duty from the AED base; licence debits record exemptions. AED is imposed on landed cost plus customs duty when that duty is actually leviable. If basic customs duty is exempted through a licence, the exempted amount is not included in the base for calculating AED; the licence debit is an administrative record of exemption rather than payment. Licence debits likewise track any exemption of AED itself where applicable.