The Central Board of Indirect Taxes and Customs has issued the clarification regarding the applicability of Social Welfare Surcharge on goods exempted from basic and other customs duties/cesses.
The matter has been examined. Social Welfare Surcharge (SWS) is levied and collected, as a duty of customs, vide Section 110 of the Finance Act, 2018 (13 of 2018) and is calculated at the rate of 10 percent. on the aggregate of duties, taxes, and cesses which are levied and collected by the Central Government as a duty of customs on goods imported into India.
In this regard, it may be noted that at present SWS applies at the rate of 10% of the aggregate of customs duties payable on the import of goods and not on the value of imported goods. If aggregate customs duty payable is zero on account of an exemption, the SWS shall be computed as 10% of value equal to ‘Nil’ (as the aggregate amount of customs duties payable is zero). Law does not require computation of SWS on a notional customs duty calculated at a tariff rate where the applicable aggregate of duties of customs is zero.
The CBIC had clarified that the amount of Social Welfare Surcharge payable would be ‘Nil’ in cases where the aggregate of customs duties (which form the base for computation of SWS) is zero even though SWS has not been exempted.
The contents of this circular may please be brought to the notice of trade and industry through the issue of Trade/ Public Notices. The field formations may also be suitably sensitized in this regard. The difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
