Cenvat credt of BCD & CVD paid on import of capital goods

[Guest]

Dear Sir/Madam,

We are into service industry. We not manufacture any good. For providing output services, we import reach stalkers and we pay various duties on it while importing. I wish to know about the admissibility ofcenvat credit on various duties paid by us. The following are the duties paid by us.

1.BCD @ 7.5 %

2. CVD @ 14%

3. Edu cess on CVD @ 2%

4. SHE cess on CVD @ 1%

5. Addl Duty (imports) @ 4%

6. Customs Edu Cess @ 2%

7.Customs SHE Cess @ 1%

Kindly advice which type of duties qualifies for Cenvat Credit.

 

Thanking You.

[YAGAY andSUN]

The customs duty calculation depicted in your query, does not fall under the category of new methods of calculation of customs duty.

Please check, as you are opting the old method for calculating the customs duty.

You may avail the CENVAT credit of CVD upto the limit 50% in the first year and balance 50% in the next financial year. 

But you may avail the 100% CENVAT credit of SAD portion of customs duty in the very first year.

[Guest]

Dear Pradeep Sir,

As per my understanding, the benefit of SAD is not available to service providers. It is available only to Manufacturers. I again request you to consider that we are into CFS business and hence we fall under the category of service providers. In this regard, can we avail the cenvat of Addl. Import duty (SAD) paid by us. ?

Kindly also mention the new method of calculation.

I am heartily thankful for your advice.

AI Summary

Service Provider Seeks Clarity on Cenvat Credit Eligibility for Import Duties on Capital Goods A service industry professional inquired about the eligibility of Cenvat credit on various duties paid during the import of capital goods. The duties listed include BCD, CVD, education cess, SHE cess, additional duty, and customs cesses. A respondent advised that the Cenvat credit for CVD can be claimed up to 50% in the first year and the remainder in the next year, while 100% credit for SAD is available in the first year. However, the inquirer clarified that SAD benefits are typically not available to service providers, seeking further clarification on this matter.