Basis of levy of additional Customs duty (CVD) on import of Readymade Garments – CBEC clarifies
It has been brought to the notice of the Board that in some cases of import of readymade garments, the additional duty of Customs (CVD) has been sought to be levied on the basis of the Maximum Retail Price (M.R.P)/Retail Sale Price (R.S.P) of the garments.
The Board reiterates some clear legal facts:
1. Imported goods are charged to additional duty of customs (CVD) on the basis of transaction value as per the provisions specified in section 14(1) of the Customs Act read with the Customs Valuation Rules, 2007.
2. If any tariff value is prescribed by the Government for imported goods, then the CVD would be determined with reference to tariff value as prescribed.
3. In respect of certain specified goods which are notified under Section 4A of the Central Excise Act, and in respect of which the RSP/MRP is required to be declared, the excise duty, and the CVD , is charged on the basis of the Retail Sale Price (and not on the basis of the transaction value).
4. Readymade garments falling under Chapter 61 or 62 of the Customs Tariff are not specified under the Notification No.14/2008-CE (N.T) dated 1.3.2008 which prescribes the goods that are subjected to excise duty on the basis of retail sale price in terms of Section 4A of the Central Excise Act.
5. It is clear that import of readymade garments would be subjected to CVD only on the basis of transaction value and not on the basis of retail sale price.
And so clarifies that for the purpose of uniformity in assessment, presently the additional duty of Customs (CVD) is chargeable on import of readymade garments on the basis of transaction value i.e. C.I.F. price plus landing charges and not on the basis of Retail Sale Price/Maximum Retail Price.
CBEC Circular No.17/2008-Customs Dated: October 21, 2008