Mrp abatement - weights & measures

Arun Kumar Singh (GST Advocate) (15188 Points)
Replied 15 February 2013

Abatement is not available for central excise tariff head no. 32049000. You should consult a tax advisor so that they can give you proper advise. 30% abatement is available for the chapter heading 320420 under notification no. 49/2008-CE(N.T.).

Ranjan R (Service) (39 Points)
Replied 21 February 2013

Dear Arun

The Tariff classifcation ( called chapter ID by you) at 32049000 means your product is industrial colorant. The chapter heading 32139000 covers artist's colour material ,student colour material etc. Industrial colorants can not be classified as artist's/students colurs and if your competetor is making same product as yours,then he is classifying it wrongly. If your product is indsutrial colourant, it would be legally incorrect to calssify it at 32139000 as artists/students colour.

MRP based duty normally comes higher than duty based on transaction value, if MRPis declared is actual and correct. Please check in your case , you probably have no advantage in MRP based duty.

Since your product is not covered under notifcation 49/2008-CE (NT) -- 21.12.2008 vide which duty based on MRP is levied, you are not required to pay duty on MRP basis just because you are printing MRP on your packages. Please note that under section 4A , if a product on which Weights and Measure Act applies, has beeen notified by Central Govt for levy of duty on MRP basis, then only duty under MRP has to be paid. Since your product has not been notified by Govt as MRP item vide notifcation 49/2008, you are not required to pay MRP based duty even if you declare MRP on packages.

Hope this clarifies your query.

Arun (BDM) (34 Points)
Replied 22 February 2013

Dear Mr. Arun

Good morning. Thanks for your reply.

1. The chapter ID part is very clear from your mail.

2. For the customer who can accept my product label I don't have issue and happily clearing the material under transaction value in 32049000.

3.. Some of my customers are asking my product in their label and with their MRP and at the moment buying from my competitor now on 65% abatement as per chapter ID 32139000.

4. Today my customer can buy 50% of their requirement from us and 50% from my competitor. Since my customers are used to the above procedures, If I go and supply this material by clearing the material on transaction value and not on MRP abatement mode. Will they end up in trouble, if they have any audit by excise dept. etc. tomorrow.

5. I dont know whether Legal meterology act as such is enforcing us to put MRP in our product and our chapter ID is not listed under section 4A.

6. In this case, if i print MRP of my customer and their label in our product should I clear the excise on transaction value or 100% of MRP value (or) just because of prinitng MRP can I go and pay the excise on 65% of MRP (remember my chapter ID is not listed in section 4A and abatement % is not defined.)

Thanks & Regards

M. Arun Pandian

Ranjan R (Service) (39 Points)
Replied 22 February 2013

Dear Arun

Just because you are printing MRP ,you are not required to pay MRP based duty . The MRP based duty would be rquired only if you change classifcation of your product to 32139000. So first be sure about classification of your product. If it is 32049000, do as you are doing,however if it is not 32049000 but 3213000 then you are bound to pay MRP based duty.

If your buyers are Central Excise assessee, they would certainly be asked questions during audit as to how they procured 50 % goods on Transaction Value bsed duty and 50% on MRP based duty.

I would advice ,you first be sure about classification of your product, and then follow the TV or MRP based duty as applicable. Remove this idea from your mind that if you print MRP ,you have to pay MRP based duty. Classification is the most importnat thing to determine the basis of duty and you can not change it at your own wish.

Neha Tayal (CA Practice ) (21 Points)
Replied 23 December 2015

Hi All

Can anyone help me out on the following:

If the goods are not mentioned in the Notification No. 49/2008, then also Section 4A would be applicable? If yes, then which are those goods??

Arun Bhat (Others) (24 Points)
Replied 06 October 2017

Dear Sir,
I have a Automobile Spare Parts Shop where in I have every spare part meant for Sale is bought through proper Invoicing. (GST Invoice_Inter State Purchases). Today Legal Metrology Department had seized 5 No. of Car Tapes and 5 Nos. of Car Tape Speakers which I personally bought from local sellers which were bought for giving Gifts to the Local Mechanics. Total worth is Rs. 1600/- The local Vendor didnt issue TAX INVOICE. The said Tape Speaker Boxes were not having MRP printed on them and also no items were sold to anyone. THESE ITEMS WERE NOT FOR SALE AND I NEVER EVER SOLD SUCH ITEMS IN MY SHOP. Since these items were not having MRP, Today the Legal Metrology Department people seized the items and are threatening with legal actions and punishments. Please help me as I have not done any mistakes and frauds.

Thanks in advance

Arun.V.Bhat