Imported Fertiliser to attract 1% CVD, but complicated language continues

By Vijay Kumar

FINALLY the Government has notified a 1% CVD for imported fertilisers. This was a major issue raised in our Mumbai Seminar on 18 March 2011. DDT 1572 covered it as:

1% duty on imported goods:

A number of goods which hitherto attracted Nil rate of duty have been notified under Notification 1/2011 CE dated 1.3.2011 with an effective rate of 1% subject to the condition that no CENVAT Credit shall be availed on the inputs/input services. When these goods are imported, the CVD is levied at 5% as the condition of non-availment of CENVAT Credit is non-verifiable for imported goods. This is leading to disparity and to cite an example, fertilisers attract 5% CVD when imported and when manufactured within India, it attracts only 1%. It is suggested that an unconditional exemption notification under Section 3 of the Customs Tariff Act, 1975 may be issued for these goods.

As to whether 1% duty is applicable to imported goods, the JS TRU clarified that 1% rate will not be applicable for CVD purposes. [Please see ]

In DDT 1572 , it was mentioned,

Fertilisers Exempted or Not?

“ All goods, other than those which are clearly not to be used as fertilisers” are exempted. The language of the Notification appears to be unnecessarily complicated and it is really not clear as to whether the Fertilisers still continue to enjoy exemption by virtue of Notification No. 04/2006. The scope of the exemption needs to be clarified.

In fact, a Commissioner asked me, “ Can you make out as to why instead of just saying "Fertilizers", they have used this long-winding expression? ”

Consultants and Commissioners have difficulty in understanding the expression – what about poor assesses?

Now the Government has exempted all goods, other than those which are clearly not to be used as fertilisers , from so much of the additional duty of customs as is in excess of 1% ad valorem.

Why is the Government bent upon making even simple notifications so complicated?

Notification No. , Dated : April 15, 2011