No countervailing duty on SEZ imports

The revenue department has clarified that the countervailing duty of 4 per cent would not be levied on imports under advance licence, export-oriented units, special economic zones and the export promotion capital goods scheme.

The clarification has been issued by the department following references from trade regarding different practices being followed by Customs houses regarding the levy of 4 per cent CVD for goods imported under the various export promotion schemes.

A doubt has also been raised regarding levy of the CVD on imports made against duty credit scrips issued under the Vishesh Krishi and Gram Udyog Yojana.

Further, a clarification has been sought whether the CVD debited in the Duty Entitlement Passbook Scheme, Duty Free and Credit Entitlement, Target Plus and other such licences is eligible for CENVAT credit or drawback.

"It is clarified that the 4 per cent CVD duty is debited in DEPB, DFCE, Target Plus etc. Certificates may be allowed to be taken back as drawback (brand rate). It may be mentioned here that under the foreign trade policy, additional Customs duty (CVD) debited in DEPB scrips/certificates issued under reward schemes is allowed to be taken as CENVAT / drawback," the circular said.

In the case of imports under EPCG scheme, the department has clarified that imports under the scheme itself provides for exemption from additional duty.

The special additional duty of 4 per cent is, therefore, not applicable on imports under EPCG scheme.