Customs duty is different on raw cashew and cashew kernel. So if the customs or central sales tax department declare both as separate commodities, problems may arise in getting SAD as an input credit under CENVAT or in any other central scheme.
This was the real problem in some Indian states during the state sales tax period. SAD is a new subject to the Indian cashew industry. Therefore exporters should get official clarification on the issue to avoid further litigation.
According to some experts, best way for exporters to get SAD as an input credit under CENVAT or in any other scheme is Central Sales Tax. This point also needs official confirmation.
Genuine exporters import less but export more. They contribute to the country’s forex reserve. Their interests should be safe guarded.