Interest is not leviable on CVD/SAD – Supreme Court dismissed Government’s SLP

The Supreme Court of India has ruled that interest is not payable on delayed or non-payment of Countervailing Duty (CVD) and Special Additional Duty (SAD) as there is no provision under the Customs Tariff Act, 1975 (CTA) to levy interest on CVD/SAD.
This decision applies to delayed or non-payment of Integrated Tax (IGST) on import of goods as well as CVD/SAD/IGST paid on Advance Authorisation and EPCG defaults.
Taxpayers may explore filing a refund of interest paid in the past, relying on the 9-judges’ decision of SC in the case of Mafatlal Industries.
Importers can now analyze whether to opt for DGFT Amnesty scheme or not to opt since the portion of CVD/SAD is always higher in total duty for EPCG scheme.