Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit

Circular No. 23 /2012-Custom
R.No.146 I, North Block

New Delhi, dated the 30^th August, 2012

To
Chief Commissioner of Customs (All)
Chief Commissioner of Customs & Central Excise (All)
Director Generals (All)

Sir/Madam,

Subject: Applicable rate of CVD on imported Fertilizers-regarding.

Representations have been received from trade as well as the field formations regarding the applicable rate of additional duty of customs (CVD) on Fertilizers when imported into India. Doubts have arisen in view of the fact that in Notification No. 12/2012-Customs, dated 17-03-2012, except for Serial Number 200(ii) [where the CVD rate of 1% is mentioned in column (5)] the entry in this column for all other Serial Nos. is “-“(dash). In terms of the Explanation II (b) of the said Notification, “–” appearing in column (5) means additional duty equal to duty of excise leviable on the goods as per the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) read with any other notifications issued under sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), for the time being in force. Since, the effective rate of CVD has been prescribed in the case of fertilizers, through a notification issued under section 25 of the Customs Act, 1962, some field formations have sought to apply the effective rate of excise duty of 6% ( with cenvat credit) for the purpose of charging CVD on this item.

2. The matter has been examined. Even though it is true that for many S. Nos. of notification no. 12/2012-Customs pertaining to goods falling under Chapter 31(S. Nos 196 to 199 and 200 to 205) the entry indicated in column (5) is ‘-‘, S. No. 200(ii) covering “All goods, other than those which are clearly not to be used as fertilizers” prescribes a CVD rate of 1% in column (5). It is relevant that the entry pertaining to basic customs duty indicated in column (4) against this S. No. is ‘-‘ implying thereby that the otherwise applicable rate of basic customs duty is to be charged. From a combined reading of other S. Nos. covering goods of chapter 31 and S. No. 200 (ii), it is evident that the benefit of concessional CVD of 1% is available to “All goods, other than those which are clearly not to be used as fertilizers” even if the benefit of concessional basic customs duty under any other S. No of the same notification is claimed. For instance, an importer claiming the benefit of concessional basic customs duty of 5% under S. No. 204 covering “Potassium sulphate containing not more than 52% by weight of potassium oxide”, would be eligible for the benefit of concessional CVD of 1% under S. No. 200 (ii) if the goods are to be used as fertilizers. However, to avoid disputes & place the matter beyond doubt, notification no. 46/2012-Customs dated 17^th August, 2012 has been issued to expressly prescribe the effective rate of CVD against the relevant serial nos.
   
   
3. The above position may be brought to the notice of formations under your charge, for strict compliance, especially in respect of assessments for the period prior to 17^th August, 2012.
   

Yours faithfully,
(Vivek Johri)
Joint Secretary (TRU)
Tel: 2309 2687
Fax: 2309 2031