Imp Supply No. 50/2005
Exp Supply No. 50/2005

PUBLIC NOTICE No.-08/2005 Date : 01.03.2005

Sub: Levy and collection of 2% Education cess on imports under various Export Promotion Schemes – reg.
1. Attention of all the Importers/ Exporters/ CHAs and all other concerned is invited to the above-mentioned subject. It is noticed that after the imposition of Education cess in the last Budget, doubts have been raised as to whether 2% Education Cess is to be levied on the imports cleared under Advance Licence, DFRC, EPCG and DEPB Schemes.

2. The matter has been examined by the Ministry and in order to remove any doubt regarding the scheme of levy and collection of 2% Education Cess on import under various Export Promotion Schemes following is clarified.

3. The Education Cess imposed in the last Budget is leviable @ 2% of the aggregate duties of Customs (except Safeguard Duty under Section 8B and 8C, Countervailing Duty under Section 9 and Anti-Dumping Duty under Section 9A of the Custom Tariff Act, 1975) on all items imported into India.

(i) Import against Advance Licences are exempt from all Duties of Customs, and therefore, it is clarified that Education Cess @ 2% would not be leviable on such imports.

(ii) In the case of imports under DFRC, the Additional duty of Customs is payable and, therefore, Education Cess is also payable on the Additional Duty.

(iii) On the same principle, Education Cess is also payable in case of imports under EPCG Scheme under which the goods attract a concessional Duty of 5%.

(iv) However, in the case of imports under DEPB Scheme, the position is slightly different. As per the notifications governing imports under DEPB Scheme, the Basic Duty and the Additional Duty are exempt subject to the condition that the duties leviable on the goods are debited from the DEPB. In other words, in the case of DEPB Scheme, though the imports are governed by an Exemption Notification, the fact remains that in case of such imports the duty is debited from the DEPB Scrip. Therefore, it is clarified that in the case of imports under DEPB Scheme, the Education Cess @ 2% would also be debited from the DEPB Script. In case such debit is not possible from DEPB Script or it has to be recovered later on, it may be paid in cash.

Sd/-
01.03.2005
(K.P. MISRA)
COMMISSIONER OF CUSTOMS (EP)
MUMBAI
[Based on CBEC Circular No. 5/2005-Cus dated 31.01.2005]

ATTESTED BY
Sd/-
(P.B.VAISHNAO)
ASSTT. COMMISSIONER OF CUSTOMS
APPRAISING GROUP-VII

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