Importer-cvd sad credit-

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Hi, I am from a China firm and found this website online. I love this place and if you have question relating to PRC tax, I would like to answer.

My issue:

My client is a foreign subsidiry in India, who import goods from China. We have learned that when import goods, BCD, CVD and SAD will be leived. And if the importer undertake excise dealer registeration, it can pass the CVD and SAD to the Customers.

 

My understanding is that:

1. My understanding is that CVD is equal and similar to excise duty, and SAD is equal and simlar to VAT.

2. Therefore, if the importer pays BCD + CVD +SAD, and sell the goods to a customer.  The importer could get excise dealer registration, and by doing so, the CVD and SAD credit can be passed to the customer.  If the customer need to pay excise duty or VAT in the future, he can use the CVD and SAD to credit.

Please confirm whether my understanding is correct.

3. Meanwhile, I also heard that the SAD can be claimed refund if certain conditions are met.  Anyone can inform me what conditions should be met to get the refund.

 

Thanks and best regards!!

Voice Liu

Replies (2)

Dear VoiceLu. CN,

Your most of the understanding is correct . However I will clarify some issues

1. You cannot utilise SAD or CVD credit for the payment of VAT. Because SAD & CVD are the central taxes & VAT is a State Goverment tax.

2. The importer can pass CVD & SAD only to Manufacturer or 1st Stage or 2nd Stage dealer. He cannot pass the to end consumenr do not have excise registration.

3. If the imported goods are used in manufacture of goods which are exported or supplied to 100% EOU, SEZ  then you can claim refund of SAD. There are also various export promotion schemes like EPCG, Advsnce Authorisation, DFIA etc. Under EXIM Policy under which you need not to pay BCD, CVD & SAD

Still if you have any doubt fill free to ask. You can directly reach to me at nitin.karmalkar @ bizsolindia.com

 

Regards

CA Nitin Karmalkar

 

Hi,

CVD means the additional duty leived under section 3 of customs tariff Act?

Additional CVD (SAD) is the additional duty leived under section 3 (5) of Customs tariff act?

Can we claim full SAD amount from the excise liability?

Could anyone clarify this please?

Thanks,

manoj


CCI Pro

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