Cenvat credit on Bill of Entry & exemption on Edu. Cess & SHE. Cess on CVD.

[Srivatsan Krishnamachari]

Dear Learned Friends,

Your valued clarification is required for the two queries.

Query No.  1

We Import our raw materials and the following  the duties and  Adl. Duty, Edu. Cess & SHE. Cess on CVD, Edu. Cess & SHE. Cess on Cutoms duty are paid by us.

1. Basic Value
2. Customs Duty (BCD)
3. Total of  1+2
4. CVD on Item no.3
5. Edu. Cess on CVD @2%
6. SHE. Cess on CVD @1%
7. Total of item no.2+4+5 + 6
8. Customs Edu. Cess @ 2% on item no.7
9. Customs SHE. Cess @ 1% on item no.7
10. Total of Items 1+2+4+5+6+8+9
11. Adl. Duty @ 4% on item no. 10
12. Total Duty (2+4+5+6+8+9+11)

 

We have been taking Cenvat credit on item no. 4, 5, 6 & 11 i.e. CVD, Edu. Cess & SHE. Cess on CVD and Additional Duty (the prevailing rate is 4%)

This practice is being followed for years together.  Please clarify whether this practice is correct.

 

Query No.  2

The  Customs Notification No. 13/2012 & 14/2012 dtd. 17-03-2012, specifically exempts all the goods falling within the 1^st schedule to the Customs tariff act 1975 (51-1975) when imported to India from Edu. Cess & SHE. Cess  which are leviable there on under sub-section 1 of section 3 of customs tariff act 1975, read with section 91, 93 & 94 of the said finance act.

We need clarification whether this exemptions cover Edu. Cess & SHE. Cess levied on both (CVD+BCD).

 

Thanks & with Regards,

Benarjee  Govada

 

 

 

[Radha Arun]

Customs notification 13 and notification 14 of 2012 exempt all imported goods from the education cesses on CVD only, not on BCD. Accordingly, in your qs 1, items 5 and 6 can be omitted. Item 7 will be the total of 2 and 4. The education cesses on customs duty will be worked out on the value in item 7.

You can take Cenvat credit of CVD and of the 4% additional duty.

[Guest]


We import our Raw Material and paid all duties taxes.

But as per Bill of Entry, customs charge education cess &  Higher edu cess on both BCD & CVD.

please clarrify.

 

 

[Guest]

We import our Raw Material and paid all duties taxes.

But as per Bill of Entry, customs charge education cess &  Higher edu cess on both BCD & CVD.

please clarrify, can we take credit on Edu & S edu cess of CVD ?

[Radha Arun]

Earlier, the education cesses were charged on CVD equal to excise duty, and then charged again on the total customs duty including CVD. Now it is only charged on the total customs duty including CVD.

Hope this clarifies the matter.

AI Summary

Cenvat credit on CVD permitted; education cess on CVD exempted by notification while cess on total customs duty remains leviable. Notifications exempt education cess and higher education cess on CVD for first schedule imports, so those cesses on CVD may be omitted from the duty calculation; education cesses that apply are computed on the total customs duty value inclusive of CVD. Cenvat credit is available for CVD and the Additional Duty, while education cesses on customs duty remain leviable where not exempted.