Scrap SAD refund

From September 2007 the govt announced that even traders were eligible to get a refund of the 4% Additional duty of Customs AKA 'SAD'(which is levied in lieu of local taxes).

SAD, what an apt name, as the whole levy is a SAD state of affair.

Earlier manufacturers were eligible and were utilizing this as input tax credit, setting it off against their tax liability. Now, a trader has also been given the benefit of availing the refund of SAD paid by him at the time of import

Given that this is the current scenario, then GOD tell us all, why the hell are they still levying this duty.

Effectively the govt is levying a duty that it later refunds to the assessee. So then why are they levying this duty at all!!??!!

The excess burden put on the assessee, to track his imports with the ultimate point of sale, then tally this with his Bill of Entry ('BOE'), and incase the BOE has more than one item, then track which one has been sold and which hasn't been.

WOW!! Complete madness.

The assessee is required to file his refund application at the customs' place, where the product was imported. The application needs to be supported with sales tax (oops VAT) payment proof, TR6 challans (duty payment receipts) and some such. So this effectively means that if the product is imported in Bombay and ultimately sold in Panipat, the assessee has to track this product, get the sales invoice with duty payment receipt, BOE etc and then annex them with the refund application, so as to get his refund.

Now, lets look at it from the Custom department's side. The guy who will be processing the application has to verify all the docs, for all the importers claiming the refund. WOW!! pagal ho jai ga woh!!

Why, in God's name!!

Why is, Mr.P. Chidambram, doing this to the trader (not manufacturer as he has a simple way of just utilizing the SAD as input credit) and to the Custom’s guys.

Had the duty been scraped right at the start, this whole crazy exercise won't have to be done.

Also, there is no loss of revenue. The scraping of the duty is a revenue neutral decision.

If this is done only good wishes of the assessee and the Customs’ guys will be coming his way.