Importers will get refund of special CVD
Importers will get refund of special CVD Importers will now get a refund of the special countervailing duty (CVD) after furnishing proof of VAT/sales tax payment, reports Economic Times.
The revenue department has withdrawn the 4% special CVD, also known as special additional duty (SAD), on VAT-paid imports. A notification has been issued on September 14, regarding this matter.
White goods, computers, video cons and mobiles in the import market will be cheaper by at least 5%. This will result in reduction in smuggling of small computer parts such as memory chips and mobile accessories like batteries. Imports through formal channels will now be charged at 25.97% total duty. This measure will put import traders and manufacturers will be at the equal level in the organized sector.
Earlier, traders had to pay tax twice, once as special CVD equivalent to 4% VAT to the central government and, later, upon actual sale in the domestic market as VAT to the respective state governments.
Manufacturers, on the other hand, could set off the special CVD on the imported raw material, parts and consumables as well as capital goods against the VAT due on the final product. The differential between the two segments on account of the special CVD discrimin ation was 5.05% on the average 7.5% basic duty; the scaling up by 1.05% over the nominal rate of 4% is on account of the base, which covers value of goods plus 7.5% basic Customs and 16.48% excise duty.
It seems that the refund procedure for the special CVD is fraught with alternative interpretations and delays.
