Exemption from Additional Customs Duty for goods imported for subsequent sale – Board further complicates the procedure
The Government had by Notification No. 102/2007-Customs dated 14.9.2007 exempted goods imported for subsequent sale in India, the whole of Additional Customs Duty under section 3(5) of the Customs Tariff Act, to counter balance the sales tax, VAT etc., The exemption works in a roundabout way of first paying the duty and then claiming refund. And the refund is subject to conditions like the Additional Duty is not claimed as a credit and the importer paying the appropriate sales tax/VAT when the goods are sold.
Now the Board has further complicated matters by issuing a clarification yesterday. As per the Board Circular,
All refund applications under the aforesaid notification shall be received by the concerned field formations in their Centralized Refund Section, and the applicants would be given proper acknowledgement.
Time – Limit: Though no time limit is fixed in the notification:
Taking into account various factors, it has been decided to permit importers to file claims under the above exemption upto a period of one year from the date of payment of duty. Necessary change in the notification is being made so as to incorporate a specific provision prescribing maximum time limit of one year from the date of payment of duty, within which the refund could be filed by any person. Unsold stocks would not be eligible for refunds.
It is also clarified that only a single claim against a particular Bill of Entry should be permitted to be filed within the maximum time period of one year. Filing of refund claim for a part quantity in a bill of entry shall not be allowed except when this is necessary at the end of the one year period.
Documents to be enclosed with refund claim :
Notification No.102 /2007-Customs dated 14.9.2007 prescribes the documents that shall be enclosed along with the refund claim. In order to ensure sanction of refund properly, it is clarified that the document evidencing payment of ST/VAT (in original) duly issued by or acknowledged by the concerned ST/VAT authorities shall be submitted by the importer. A certificate from a Chartered Accountant or any other independent authority certifying payment of ST/VAT would not be acceptable in lieu of the original documents. However, a certificate from the statutory auditor / Chartered Accountant, who certifies the importer's annual financial accounts under the Companies Act or any statute, correlating the payment of ST/VAT on the imported goods (in respect of which refund is claimed) with the invoices of sale, would be required along with the original tax / duty payment documents as proof of payment of appropriate ST/VAT for the purpose of para 2(d) & (e) of the said notification.
Unjust enrichment:
The principle of unjust enrichment needs to be examined in each case before sanction of refund under this notification. However, considering the voluminous transactions and the documents involved in the cycle, from import to sale, it was felt that it would be expedient to allow the importer to submit a certificate from the statutory auditor / Chartered Accountant who certifies the annual accounts of the importer, that the burden of 4% CVD has not been passed on by the importer to the buyer and to fulfill the requirement of unjust enrichment.
4% paid through DEPB :
It is clarified that instead of refunding the duty in cash, the amount eligible for refund should be re-credited on the relevant DEPB Scrip.
The whole idea seems to be to somehow ensure that the refund is not given. If that be so, why all this farce?
CBEC Circular No. 6/2008- Cus ., Dated: April 28, 2008