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Customs & excise query

Rakesh Rao (CA Final Student) (408 Points)

21 March 2016

If Education Cess is not to be charged on Excise Duty, then why is it charged on Additional Customs Duty u/s 3(1) which is collected in lieu of Excise Duty?

Education Cess is not levied on Additional Customs Duty u/s 3(5) because it is collected ion lieu of VAT on which Education Cess is not applicable. Same logic should apply to Additional Customs Duty u/s 3(1) right?

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2 Replies

CS M Pota (Company Secreatary) (3180 Points)
Replied 03 April 2016

Dear Mr. Rao,

I belive that you are taking about Education Cess on Additional Customs Duty (which is also known as Countervailing Duty or CVD which is charged in lieu of the central excise duty) and Additional dyty (which is also known as Special Additional duty or SAD which is charged 4% in lieu of VAT)

See the education cess charged in the Customs duty Structure is charged on Basic customs duty + CVD which in the duty structure is considered both togather (Basic Customs duty + CVD) as Customs duty in otherward CVD is a part of Customs duty so in the Customs duty calculation both the education cess is charged the Basic Cutoms duty + CVD. For your better understanding if you see Customs duty structure of the year 2010-11 you can see that both the Edusction cess were charged twice and duty structure was Bacic Customs duty+CVD+2% education cess on CVD+1% edu.Cess on CVD+2% education cess on (Basic customs duty + CVD)+1% edu.Cess on (basic Customs duty + CVD)+4% SAD on (assessable value and all duty from basic to edu.cess).

Now the governmament has removed the edu.cess on excise duty but not from customs duty so the edu cess needs to be paid on basic customs and CVD as the CVD is a part of Customs duty..

I hope the above will clear you question.If you have any.more to ask please write.

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