Additional
Duty of Customs (CVD) Chargeable on Readymade Garments is on the Basis of MRP
[CBEC Circular
No. 12 dated 21st June 2010]
Subject: Basis
of levy of additional Customs duty (CVD) on import of Readymade Garments –
Clarification.
The issue of
the additional duty of Customs (CVD) on import of readymade garments on the
basis of the Maximum Retail Price (M.R.P.) / Retail Sale Price (R.S.P.) has
been under the consideration of the Board for quite some time. Representations have been received from the
trade and industry as well as the field formations seeking a clarification in the
matter.
2. The issue was
examined in the Board vide Circular No. 17/2008-Cus dated 21-10-2008 and it was
clarified that for the purpose of uniformity in assessment, the additional duty
of Customs (CVD) is chargeable on import of readymade garments on the basis of
transaction value i.e. C.I.F. price plus landing charges and not on the basis
of R.S.P./ M.R.P. However, w.e.f
19.-08-2009 a proviso has been inserted in Section 3(2) of the Customs Tariff
Act, 1975 vide Section 93 of the Finance Act 2009 which reads as “Provided
further that in the case of an article imported into India, where the Central
Government has fixed a tariff value for the like article produced or
manufactured in India under sub-section (2) of Section 3 of the Central Excise
Act, 1944, the value of the imported article shall be deemed to be such tariff
value.”Thus Board’s Circular No. 17/2008 dated 21.10.2008 has lost its
relevance.
3. In view of the existing legal provisions i.e.
Section 3(2) of the Customs Tariff Act, 1975, read with Section 3(2) of the
Central Excise Act, 1944, the Notification
No. 20/2001 CE (NT) dated 30.04.2001 and Sr. No. 21 of the Fifth
Schedule of the Standards of Weights and Measures Act 1976. Government has
fixed tariff value in respect of articles of apparel, whether or not knitted or
crocheted, all sorts, falling under Chapter 61 or 62 of the First Schedule of
the Customs Tariff Act, 1975 when imported in packaged form for retail sale at
the rate of 60% of MRP. Accordingly, it is clarified that for the purpose of
uniformity in assessment, the additional duty of Customs (CVD) is chargeable on
import of such readymade garments on the basis of their R.S.P./
M.R.P.
4. The field formations as well as trade and
industry may be suitably informed.
F.No.528/21/2008-Cus (TU)