prpri Credit of CVD & SAD paid post 01.07.2017 under Advance Authorisation Scheme-Importers left remediless Credit of CVD & SAD paid post 01.07.2017 under Advance Authorisation Scheme-Importers left remediless

The GST Policy Wing has vide its Letter dated 22.06.2020 issued its comments on Writ Petitions relating to Transitional Provisions.

On the specific issue of credit of CVD and SAD paid on non-fulfilment of export obligations in Advance Authorisation Schemes which was the subject matter of my article last week, the comments of the Policy Wing are as follows:

-That payment of CVS/SAD on non-fulfilment of export obligation is in pursuance of the conditional assessment proceedings instituted at the time of import under the existing law. The case is covered under Section 142(8)(a) of the CGST Act and any tax that is recoverable in the earlier Act cannot be recoverable under the CGST Act.

-That the failure to fulfil the conditions of EPCG license/ Advance Authorization, etc. does not entitle the petitioner any benefit under the said Scheme.

-That any pre-existing taxes or duties viz-a-viz Excise duty, Service Tax, Additional duty of Customs (CVD) paid under provisions of Section 3(1) of Customs Tariff Act and Special Additional duty of Customs (SAD) paid under Section 3(5) of Customs Tariff Act etc. are not covered under the definition of “input tax” and hence, cannot be governed by the provisions of Section 16 of the said Act. These taxes are to be governed by the transitional provisions laid under Section 139 to Section 142 of the CGST Act 2017.

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Experienced Attorney with a demonstrated history of working in the legal services industry. Skilled in Indirect Taxation Litigation and Advisory, GST Impact Study and Legal Research. Strong professional graduated from New York University School of Law. View Full Profile

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July 2021