Social Welfare Surcharge will be ‘Nil’ when Basic Customs Duty is ‘Nil’: CESTAT

Social Welfare Surcharge will be NIL when Basic Customs Duty is NIL The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Kolkata ruled that when the Basic Customs Duty (BCD) is nil, the Social Welfare Surcharge (SWS), which is calculated at 10% of the BCD, will also be nil. This decision came from the case of Emami Agrotech Ltd vs. Commissioner of Customs (Port). The tribunal clarified that SWS is computed based on the aggregate of customs duties payable. If the aggregate customs duty is zero due to an exemption, the SWS will also be zero. This ruling aligns with the Central Board of Indirect Taxes and Customs (CBIC) clarification that SWS should not be computed on a notional customs duty where the actual customs duty is zero. This decision is significant for importers as it confirms that no additional surcharge is payable when the basic customs duty is exempted, thereby reducing the overall import cost.