Is LPG not a petroleum gas? Is 4% additional duty leviable on LPG? - Board clarifies
More than a year ago, DDT 323 [16 03 2006] asked, Is LPG not a petroleum gas? Is 4% additional duty leviable on LPG? - Board's clarification needed. Well, the Board has clarified the issue after more than a year.
The issue was: As per NOTIFICATION NO. , March 1, 2006, Petroleum crude, kerosene for Public distribution scheme, liquefied petroleum gas for domestic household consumers, petrol, diesel, coal, coke and petroleum gases and fuels, falling under Chapter 27 are exempted from the 4% additional duty imposed on all goods.
Please note LPG for domestic consumption and petroleum gases are exempted. But LPG is also a Petroleum gas; then what is the purpose of exempting it separately?
We highlighted the plight of an importer of LPG for other than domestic household consumers who was allowed the exemption in some ports while it was denied in some others, for the LPG imported by him.
Now the Board's secret clarification:
By a letter dated11th June, 2007, addressed to the Chief Commissioner, Ahmedabad and copies marked to all Chief Commissioners, the Board clarified,
1. The wording of the entry 'Petroleum gases' of chapter 27 in the notification itself covers the LPG supplied to domestic consumers and LPG supplied to other category of consumers, irrespective of whether they are used for fuel or feedstock or otherwise.
2. The wording 'liquefied petroleum gas for domestic household consumers' is specifically given, as an abundantly cautious step to ensure that such domestic household use is not in any case charged with 4% CVD exemption to LPG supplied to any specific use.
3. In view of the above, Board clarifies that the LPG imported for supply to domestic consumers as well as LPG supplied other category would be eligible for exemption from payment of 4% special CVD under serial No.2 of notification No.20/2006-Customs dated 1.3.2006.
4. Accordingly, it is directed that the field formations may finalise all the Pending assessment of LPG Import.
Just look at the might of the government! Because of some drafting mistake, imports were held up, importers were made to run from pillar to post for a clarification. Within a fortnight of the notification, we brought to the notice of the Board, the confusion prevailing in various custom houses. Nobody in his right sense could have ever argued that LPG is not a petroleum gas, but it happened and it took the highest authority to clarify albeit after 15 months of mindless litigation.
LPG is okay, but is LNG a petroleum gas? Board had clarified only on LPG and so a doubt persists whether the exemption is applicable to LNG. The good Board had to again study the issue and three months after the first clarification, issued another clarification that the imported LNG, irrespective of its end-use, would be eligible for exemption from payment of 4% special CVD under Serial No 2 of Notification No 20/2006-Customs dated 1.3.2006. Accordingly, it is directed that the field formations may finalise all the pending assessments of LNG import.
Let us hope that the assessments will be completed without asking for any further clarifications.
And again, why is the Board so shy of making such important clarifications public? Board has a system of issuing circulars - why can't these be issued in public circulars?
CBEC letter F.No.620A6/2007-Cum.TU dated 11th June, 2007 and F No dated 25th September, 2007