Refund of 4% Special Additional Duty Procedure

Revised Calculation Work Sheet Notified Mandatory from 1 June 2010

The following Facility Notice was issued by the Commissioner of Customs (Import) Jawaharlal Nehru Customs House on 12th May 2010.

[Customs Facility Notice No. 53 dated 12th May 2010]

Subject: Streamlining the procedure for refund of 4% Additional Duty of Customs in pursuance of Notification No. 102/2007-Customs dated 14.9.2007.

1.   Attention of all importers, members of trade, their agents and all concerned is invited to Customs Notification No. 102/2007-Cus. dated 14/09/2007, exempting Addl. Duty of Customs (SAD) leviable under Section 3(5) of the Customs Tariff Act on goods imported for subsequent sale, Board’s Circular Nos.06/2008 & 16/2008-Customs, clarifying various related issues and this Custom House Public Notice Nos. 43/2008 & 04/2009 prescribing documents and the procedure for refund of the same.

2.   It has been brought to notice that although the CBEC Circular No. 16/2008-Cus. Dated 13/10/2008 prescribes acceptance of copies of ST/VAT challans along with the certificate of the statutory auditor / Chartered Accountant, this Custom House requires submission of VAT/ ST Challans, duly certified by the statutory auditor/ Chartered Accountant of the importer, in terms of Public Notice No. 04/2009 dated 02/02/2009. It has been pointed out that in many cases the Chartered Accountants are not willing to certify the VAT/ ST Challans and they charge a fees for certifying every VAT/ ST Challans. Therefore, it is expensive, cumbersome and time consuming procedure, especially in cases where interstate/ multiple state sales are involved and there are thousands of VAT/ ST/ CST Challans, which are to be certified by the Chartered Accountant.

3.   The issue has been examined and it is noticed that CBEC circulars on the subject do not prescribe submission of copy of ST/VAT Challan certified by the Chartered Accountant for sanction of refund. It is further seen that the statutory auditor / Chartered Accountant is also issuing a certificate in proforma at Annexure II to the Public Notice No. 04/2009 which gives details of each VAT/ ST Challans and / or evidence for adjustment of input tax credit as effective discharge of ST/VAT payment on imported goods. As each ST/VAT Challan number and date and the amount paid under each challan is specified in the certificate, further certification of each copy of ST/VAT Challans does not serve any useful purpose.

4.   In view of above, it has been decided that henceforth, copies of ST/VAT Challans along with a certificate of the statutory auditor/ Chartered Accountant, as per the proforma annexed to this Facility Notice, shall be accepted for the purpose of sanction of refund of SAD. This will be subject to requiring the original ST/VAT payment challans or other similar documents, in doubtful cases, which shall be returned to the importer after verification, as per the instructions of the Board in Circular No.16/2008-Customs.

5.   Apart from this it has been noticed that presently the claimants are required to submit four different certificates from statutory auditor/ Chartered Accountant in Annexures ‘D’, ‘II’, ‘III’ and ‘IV’. This not only is expensive, cumbersome and time consuming but also creates lot of duplication and confusion as a result of which many a times the importers get certified their other documents from the Chartered Accountant which in fact are not so required. Therefore, in order to avoid duplication and make it simple, it has been decided to merge the various certificates from statutory auditor/ Chartered Accountant in Annexures ‘D’, ‘II’, ‘III’ and ‘IV’ into a single certificate in format Annexure ‘S’, enclosed to this Facility Notice.

6.   It is further noticed that the calculation work sheet for refund as per Annexure-A to Public Notice No. 43/2008 dated 06/06/2008 emphasizes on unnecessary details without referring to import and sale quantity, which are essential for calculation of correct refund amount. Therefore, it has been decided to modify the format for calculation work sheet for refund as per revised Annexure-A, enclosed to this Facility Notice.

7.   Public Notice Nos. 43/2008 dated 06/06/2008 and 04/2009 dated 02.02.2009 stand modified to the extent mentioned above. The instructions for acceptance of copies of ST/VAT Challans along with a certificate of the statutory auditor/ Chartered Accountant shall come into force from immediate effect and shall also apply to all pending claims. The revised Annexure-‘A’ and Annexure-‘S’ shall be mandatory from 1st June 2010 but these may be voluntarily adopted with immediate effect.

8.   All Trade and the industrial association are requested to bring the contents of this Public Notice to the knowledge of  their  members.

F.No.S/26-Misc-04/2010-11 CRC IV JNCH

Revised Annexure-A

Calculation Work Sheet for SAD Refund

Bill of Entry No.


Quantity Imported (Kg./MT/Pcs/ Bags/CTNs/ Nos./ltrs/CBM)

Quantity Sold (Kg./MT/Pcs/ Bags/CTNs/ Nos./ltrs/CBM)

SAD paid (Rs.)

SAD claimed (Rs.)


























Date:                                                                                    For M/s. ________

Signature of the Applicant.

Annexure - S

Consolidated Certificate from the statutory auditor / Chartered Accountant towards unjust enrichment, payment of appropriate ST/VAT, correlating payment of ST/VAT with the sale invoices and sale through consignment agent/stockist for the purpose of refund of the Special Additional Duty in pursuance to Notification No. 102/2007-Customs dated 14/09/2007.

With regard to the imports under Bill of Entry No. ________ dated _______ and TR6 Challan No. __________ dated _______, wherein the Special Additional Duty has been paid and the refund under Notification No. 102/2007 dated 14/09/2007, is sought by M/s. _________.

2.   If certified that we are the statutory auditor/ Chartered Accountants, who certifies financial records under the Companies Act, 1956/ any ST/VAT Act of the State Government/ the Income Tax Act, 1961 or any other statue, of M/s. _________.

3.   For purpose of fulfillment of the condition in Para 2 (d) of the Notification No. 102/2007 dated 14-09-2007 and for considering sanction of refund of 4% SAD, we hereby certify that we have verified the original invoices of sale, along with supporting documents towards proof of payment of appropriate ST/VAT from the original VAT/ ST Challans and / or evidence for adjustment of input tax credit, as effective discharge of ST/VAT payment on imported goods

4.   The VAT/ ST has been paid as below:-


Amount of VAT payable

Amount of VAT paid by Cash Challans

Amount of VAT paid by adjustment  of input tax credits

Details of S. No. and Date of the  entries verified from the records of the VAT Tax payer


S. No.



















5.   The refund being claimed herein is being shown in the Books of Account / Balance Sheet as “Amount due as refund of Additional duty of Customs” and same amount has not been passed on to the buyers of the sale of goods. After examination / audit the records, it is verified from records that the details as given in the enclosed Summary of Sale invoices are true details thereof. As required for examination of the principle of unjust enrichment in the case before sanction of refund under Notifn. No. 102/2007 dated 14/09/2007, this is certified that the burden of 4% CVD / SAD has not been passed on by the importer to the buyer and that they fulfill the requirement of unjust enrichment.

6.   In case of sale through consignment agent/stockist we certify that-

(i)   consignment agent/stockist M/s _________has been authorised to sell the imported goods in terms of the agreement entered into between the importer M/s __________ and consignment agent/stockist M/s _________;

(ii)  that each of the sale invoices issued by the consignment agent/stockist indicates that the sale is made by him on behalf of the importer in the capacity of consignment agent/stockist.

(iii) that appropriate ST/VAT has been paid by consignment agent/stockist M/s _______ on behalf of importer M/s ________ and that the importer, M/s ________ in turn, has paid or reimbursed the ST/VAT to his consignment agent/stockist M/s __________ along with the correlation of ST/VAT payment with 4% CVD paid on imported goods.


Date:                                                                      Chartered Accountant