What is the Full form of CVD in GST?
The CVD Full Form in GST is Countervailing Duty. There are certain aspects that fall outside the purview of GST, and Countervailing Duty (CVD) is one of them. Let’s move to the next point, what is CVD, and how it works. Basically, the Countervailing Duty is an extra duty on imported goods. It neutralizes the unfair advantage taken by foreign producers, which might be enjoyed through subsidies given by their respective governments. Subsidies may take many forms, such as cash grants, tax breaks, or cheap loans.
GST Regime and CVD
GST Act, 2017 focuses on the imposition of tax upon the supply of goods and services within India. The Act does not cover customs duties levied on imports. CVD addresses the area of customs duties, and it is governed by the Customs Act, 1962.
Basic Points of CVD
The level playing field in respect of domestic producers having cost advantage of subsidized imports is the basic reason for CVD. The WTO allows member countries to impose CVDs subject to certain conditions. Such conditions are designed to ensure that there is fair play and that CVDs are not abused.
CVD versus Input Tax Credit
There is an essential difference between CVD and Input Tax Credit that are available under GST. CVD is Additional duty on imports that is paid at the time of customs clearance. It does not form a part of the GST regime.