Basis of levy of additional Customs duty (CVD) on import of Readymade Garments –
Clarification - regarding.
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
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.
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