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Levy and Collection of SWS on imports under MEIS and SEIS Scheme

This is to update you regarding a CBIC’s circular no 02/2020- Customs dated 10th January 2020 on ‘levy and collection of Social Welfare Surcharge (‘SWS’) on imported goods when the Basic Customs Duty and Additional Duties of Customs are debited through duty credit scrips’ (under various schemes such as Merchandise Exports from India Scheme (MEIS), Services Exports from India Scheme (SEIS), etc. of the FTP). It has been clarified that the SWS is not an exempted and has to be levied and collected on imported goods. Per the recent judicial pronouncement by the Hon’ble Supreme Court in the matter of M/s Unicorn Industries vs. Union of India and Others (Civil Appeals Nos. 9237 & 9238 of 2019), it was held that there should be a separate notification issued for providing an exemption from additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted automatically. Thus, it was also clarified that:-

  1. SWS cannot be debited through duty credit scrips (like Basic Customs Duty and Additional Duties of Customs) and therefore, the importer has to be paid in cash.
  2. With respect to past cases of debits of SWS already made, payments made through debit in duty credit scrips may be accepted as revenue duly collected and recoveries in cash not to be insisted on these cases.
Read the circular here: https://www.ascgroup.in/wp-content/uploads/2020/01/Circular-No-02-2020_Customs.pdf

 

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