Many companies are currently facing an investigation from the Directorate of Revenue of Intelligence (“DRI”) for non-payment of Social Welfare Surcharge (“SWS”) on imports undertaken by claiming exemption from payment of customs duty. Central Board of Indirect Taxes and Customs (CBIC) vide Circular No. 03/2022 dated 01.02.2022 has issued a much-awaited clarification on this. The circular clarifies that if the aggregate customs duty payable on import of goods is zero on account of an exemption, the SWS shall be computed as 10% of the value of “Nil” i.e. zero.
Against this backdrop, JitendraMotwani, Partner and Rinkey Jassuja, Principal Associate, Economic Laws Practice (ELP) have co-authored an article titled ‘Social Welfare Surcharge: Much Awaited Relief For The Importers’ published by Taxsutra. In their article, Jitendra and Rinkey discuss the background for issuance of the aforesaid clarification. The article further explains as to what happens to the levy of SWS when imports are undertaken using duty scrips issued under MEIS/SEIS. Finally, the article ends on the note of how the aforesaid circular is interpreted by the Courts while deciding the issue of whether SWS can be levied in case of imports undertaken claiming benefit under MEIS, SEIS duty credit scrips.
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