F.No.354/173/2013-TRU
Government of India
Ministry of Finance
(Department of Revenue)
Tax Research Unit
Circular No. 43/2013-Customs dated 8.11.2013
Subject: Exemption from payment of SAD to parts, components and accessories etc.
of Mobile Handsets under Notification No. 21/2012-Cus, dated 17/03/2012-reg.
I am directed to invite your attention to notification No.
21/2012-Cus, dated 17-03-2012 (S. No. 5 of the Table) providing exemption from
payment of SAD to parts, components and accessories etc for the manufacture of
mobile handsets. The exemption was valid until 31.3.2013 and was subject to
actual user condition, that is to say, the importer was required to follow the
procedure set out in the Customs (Import of Goods at Concessional Rate of Duty
for Manufacture of Excisable Goods) Rules, 1996.
2. It has been reported that after 31.3.2013, manufacturer/importers are
claiming exemption from SAD on the said goods under the said notification in
terms of S. No. 1 of the Table, which provides exemption from SAD to all goods
that are exempt from payment of BCD and CVD. As this S.No. does not stipulate
observance of any actual user condition (unlike S. No. 5 of notification No.
21/2012-Cus, which provided exemption subject to actual user condition), a doubt
has been raised whether exemption from SAD should be allowed on the said goods.
3. The matter has been examined. Under notification No.21/2012-Cus dated
17.3.2012 (S.No. 1 of the Table), “goods which are exempt from the whole of the
duty of customs leviable thereon or in case of which “Free” or “Nil” rates of
duty of customs are specified in column (4) under the First Schedule to the
Customs Tariff Act, 1975 (51 of 1975) and which are also exempt from the whole
of additional duty of customs leviable thereon under sub-section (1) of section
3 of the said Act, or on which no amount of the said additional duties of
customs is payable for any reason,” are exempt from SAD. Parts, components and
accessories, etc required for the manufacture of mobile handsets are exempt from
BCD and CVD under notification No. 12/2012-Cus, dated 17.3.2012 (S.No. 431 of
the Table) subject to the condition that the importer follows the procedure set
out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture
of Excisable Goods) Rules, 1996. As per these rules, the manufacturer/importer
is required to produce before Customs a certificate from the jurisdictional
Central Excise authorities as laid down under the said Rules. In view of this,
particularly considering that the manufacturer/importer furnishes to the customs
authorities the required certificate for availing of the benefit of exemption
from BCD and CVD in respect of parts, components, accessories etc imported for
the manufacture of mobile handsets, it has been felt that the benefit of
exemption from SAD should not be denied in respect of the same goods if claimed
under S.No.1 of notification No.21/2012-Customs. The certificate which is valid
for claiming exemption from BCD and CVD ought to be taken cognizance of and the
benefit of SAD exemption allowed.
4. Accordingly, it is clarified that exemption from SAD under notification No.
21/2012-Customs (S.No. 1 of the Table) may be allowed at the port of import on
the basis of registration and the certificate issued by the jurisdictional
central excise authorities w.r.t S.No. 431 of notification No. 12/2012-Customs
without any requirement of a separate registration/certificate issued under the
said Rules w.r.t notification No. 21/2012-Customs, dated 17-3-2012.
5. Difficulties, if any, faced in the implementation of above instructions may
be brought to the notice of the Ministry at an early date.
Yours faithfully,
(Amitabh Kumar)
Director (TRU)
Telephone: 011 23092236
India's Premier Portal on Free Shipment data, DGFT, Customs and Excise matters
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