The Finance Department issued a Circular No. 02/2020-CustomsF.No.605/06/2019-DBK clarifying that SWS ( Social Welfare Surcharge ) is calculated at the rate of ten per cent on the aggregate of duties, taxes, and cesses which are levied and collected under section 12 of the Customs Act, 1962.
The Circular clarifies further that the surcharge is in addition to any other duties of Customs or tax or cess chargeable on imported goods. The Circular, quoting the ration in the case of M/s Unicorn Industries Vs. Union of India and Others (Civil Appeal Nos. 9237 & 9238 of 2019, clarified that Social Welfare Surcharge is not exempted and has to be levied and collected on imported goods.
The Circular also states that the duty credit scrips are only a mode of payment of duty and not an exemption from duty even though the use of the said scrip is governed by an exemption notification.
The Circular adds that SWS cannot be debited through duty credit scrips and therefore has to be paid by the importer in cash. The Circular directs the Directorate General of Systems to take necessary actions.
With regard to past cases, the Circular notifies that past cases should not be disturbed and the payments made through debit in duty credit scrips may be accepted as revenue duly collected and recoveries in cash not be insisted on these cases.
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