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Regarding Exemption from payment of SAD to parts, components and accessories etc. of Mobile Handsets under Notification No. 21/2012-Cus, dated 17/03/2012-reg.
November, 12th 2013

Circular No. 43/2013-Customs


Government of India

Ministry of Finance

(Department of Revenue)

Tax Research Unit


New Delhi, dated the 8th November, 2013



All Chief Commissioners of Customs.

All Chief Commissioners of Customs & Central Excise.

All Chief Commissioners of Central Excise.

All Directors General of CBEC.

Subject: Exemption from payment of SAD to parts, components and accessories etc. of Mobile Handsets under Notification No. 21/2012-Cus, dated 17/03/2012-reg.


I am directed to invite your attention to notification No. 21/2012-Cus, dated 17-03-2012 (S. No. 5 of the Table) providing exemption from payment of SAD to parts, components and accessories etc for the manufacture of mobile handsets. The exemption was valid until 31.3.2013 and was subject to actual user condition, that is to say, the importer was required to follow the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.


2.         It has been reported that after 31.3.2013, manufacturer/importers are claiming exemption from SAD on the said goods under the said notification in terms of S. No. 1 of the Table, which provides exemption from SAD to all goods that are exempt from payment of BCD and CVD. As this S.No. does not stipulate observance of any actual user condition (unlike S. No. 5 of notification No. 21/2012-Cus, which provided exemption subject to actual user condition), a doubt has been raised whether exemption from SAD should be allowed on the said goods.


3.         The matter has been examined. Under notification No.21/2012-Cus dated 17.3.2012 (S.No. 1 of the Table), “goods which are exempt from the whole of the duty of customs leviable thereon or in case of  which “Free” or “Nil” rates of duty of customs are specified in column (4) under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and which are also exempt from the whole of additional duty of customs leviable thereon under sub-section (1) of section 3 of the said Act, or on which no amount of the said additional duties of customs is payable for any reason,” are exempt from SAD.  Parts, components and accessories, etc required for the manufacture of mobile handsets are exempt from BCD and CVD under notification No. 12/2012-Cus, dated 17.3.2012 (S.No. 431 of the Table) subject to the condition that the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. As per these rules, the manufacturer/importer is required to produce before Customs a certificate from the jurisdictional Central Excise authorities as laid down under the said Rules. In view of this, particularly considering that the manufacturer/importer furnishes to the customs authorities the required certificate for availing of the benefit of exemption from BCD and CVD in respect of parts, components, accessories etc imported for the manufacture of mobile handsets, it has been felt that the benefit of exemption from SAD should not be denied in respect of the same goods if claimed under S.No.1 of notification No.21/2012-Customs.  The certificate which is valid for claiming exemption from BCD and CVD ought to be taken cognizance of and the benefit of SAD exemption allowed. 


4.         Accordingly, it is clarified that exemption from SAD under notification No. 21/2012-Customs (S.No. 1 of the Table) may be allowed at the port of import on the basis of registration and the certificate issued by the jurisdictional central excise authorities w.r.t S.No. 431 of notification No. 12/2012-Customs without any requirement of a separate registration/certificate issued under the said Rules w.r.t notification No. 21/2012-Customs, dated 17-3-2012.


5.         Difficulties, if any, faced in the implementation of above instructions may be brought to the notice of the Ministry at an early date.


Yours faithfully,



(Amitabh Kumar)

Director (TRU)

Telephone: 011 23092236


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