No need to debit Social Welfare Surcharge (‘SWS’) where customs duties paid through scrips

This is to apprise you regarding recent developments on the issue referred in the trailing mail.

Recently, the Madras High Court in the case of Gemini Edibles and Fats India v. UOI and the Andhra Pradesh High Court in the case of Dalmia Cement Limited v. UOI, have admitted taxpayers’ writ petitions challenging levy of SWS where BCD was debited through MEIS. The issue will finally be decided by the respective High Courts in due course.

NITYA Comments:

The admission of writ petitions by two High Courts is a clear reflection of a strong case for claiming exemption of SWS where BCD is debited in scrips like MEIS. In our view, the importers should consider filing refund claim of SWS paid for the past one year in such cases so that the claims do not become time barred. As mentioned in trail mail, the taxpayers have a strong case. The taxpayers should also note that refund can only be filed for a period of 1 year from the date of payment of duty else the same will become time barred.