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devang doshi (Querist)

08 March 2010 my raw material is for rs. 100.00
my processing charges is rs. 3.00

raw material is exempted goods that means i have not paid any excise on raw material.

the goods i processed is excisable.

now situation is that my output is such that i can not fix its selling price more than rs. 105.00

than what is the liability of excise duty?

SANJAY JAIN

SANJAY JAIN (Expert)

09 March 2010 The excise duty is paid on the transaction value and it may be lower to the cost as well. Hence duty is payable on the sale value and it can be differ from one to another. Here the duty is payable on Rs. 105.00.

In case the raw material is exempted from duty and you are not in a position to take credit, then the whole duty shall be paid in cash. There is no way if there is no credit of capital goods or input services.

For further query, feel free to write sanjayinfbd@yahoo.com (M-09350048731) or visit, HNO. 2489/8,Faridabad(Haryana).

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devang doshi

devang doshi (Querist)

10 March 2010 if the rate of excise duty is 14%.
than what amount i have to paid?

SANJAY JAIN

SANJAY JAIN (Expert)

10 March 2010 14% of Rs. 105/-= Rs. 15.00

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devang doshi

devang doshi (Querist)

11 March 2010 sir,
in the above question:
as my cost is rs. 100 & my selling price is rs. 105. that means i have surplus of rs. 5 only. than how can i pay excise duty of rs. 15 out of above surplus?
is it proper?

SANJAY JAIN

SANJAY JAIN (Expert)

11 March 2010 because duty is payable on the transanction value. It has nothing to do with the actual cost.
very simple the duty is paid on sale price.
And if sale price is less than cost, it is legal in the Central Excise Act.

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